Poloniex Customer Identification and Verification
Cryptocurrency traders took to Reddit on May 27, 2018, to voice their concerns about the implementation of KYC (know your customer) guidelines by US exchange Poloniex. Some traders are outraged that they will now need to provide customer identification, like passport and driver’s license information, and the lack of notice provided by the exchange.
Poloniex announced on their website on December 27, 2017, that the new rules would be implemented during Q1 2018 so traders have had up to five months’ notice. The notice issued by the exchange confirms that legacy account holders will have a daily withdrawal limit of $2,000 until they have verified their account. The withdrawal limit is increased to $25,000 per day once the account holders have updated their profiles. In addition, the website states:
“On the date of the deadline, legacy accounts will be placed in a state where:
Trading and lending will be disabled;
Open orders will be closed;
Loans will have auto-renew switched off;
Margin positions will be given an eight-week wind-down period where they can only be diminished or closed. After the eight-week wind-down period, they will be closed;
Deposit addresses will be revoked. Any deposits sent to a revoked address will not be recoverable until the account is fully verified;
Withdrawals will remain enabled at the daily withdrawal limits prior to the deadline.”
As an American registered exchange, it was fairly obvious that account holders would be expected to enforce customer identification regulations, like KYC and AML, at some point. As indicated by the daily withdrawal limits, the US government is not unduly concerned about the prior activities of small, part-time traders, and they should still be able to withdraw $14,000 per week, more than $60,000 per month, without providing any ID. Moving forward account holders that don’t verify their account will not be able to trade on the exchange.
However based on replies to a Tweet from Poloniex on May 24, 2018, it appears that there are quite a large number of account holders that have had their accounts blocked for failing to verify their accounts. Account holders received an email on May 23, 2018, indicating that their accounts would be restricted if they failed to verify their account within seven days. This email contradicts the website update from December 2017, which indicated they would be able to continue to withdrawing funds, within the daily limit, without verification.
More alarming is that the accounts appear to have been blocked several days before the seven-day notice expired. As of yet, Poloniex has not responded to account holders that have asked why their accounts were blocked prematurely.