User data on cryptocurrency exchanges has been the subject of much discussion over the past several years. Regulators the world around seem to want exchanges to collect as much of it as possible; privacy advocates in the cryptocurrency space want exchanges to know nothing about their users.
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However, these discussions were reignited once again following an incident last week, when thousands of BitMEX users’ email addresses were revealed in a mass email that was sent to every user on the exchange.
While the exact amount of exposed email addresses is unknown, some estimates point to more than 30,000 addresses. Not every user on the exchange was affected.
I now have access to about 3,000 unique emails from the BitMEX leak.
– from what I can tell, there is more than 30,000 unique emails in total
– 67% emails (from my sample size) use gmail, 7% hotmail, 4% yahoo, 3% protonmail— Larry Cermak (@lawmaster) November 1, 2019
Charles Phan told Finance Magnates that “Know Your Customer practice is in opposition to the underlying values of the cryptocurrency movement.”
“Bitcoin provides a permissionless payment system that no-one is banned from using,” he explained. “Companies that collect sensitive personal information are a gold mine for hackers and often customer data is leaked – Bitcoin gets around this by not requiring personal identification to setup an account and transact.”
However, Eric Benz told Finance Magnates that it might be that as long as the industry wants to continue to evolve toward “mainstream” usage, KYC is here to stay–and it might not be such a bad thing.
“KYC is not a bad thing at all and allows us to know our customers in a more compliant manner to, therefore, be able to thus protect the customers invade any issues that take place,” he said.
“As new verticals of business have reshaped our world economy we must also be more cautious, and KYC is a necessary means in order to establish what person or company you are dealing with. Bitcoin, by its very nature, has been designed to circumvent KYC and AML, so therefore we cannot apply antiquated processes but instead utilize the underlying technology and apply more innovative tools.”
Indeed, Phan also said that “the whole situation is likely to increase pressure on centralized exchanges to continue to improve user security and privacy and see increased competition in the space.” Here’s to a brighter future.
Finance Magnates reached out to BitMEX regarding commentary for this piece but did not hear back before press time. Special thanks to Kim Bazak.