CryptoBridge has always branded itself as a decentralized exchange platform. However, on October 1 the platform surprised its users when it abruptly introduced strict know-your-customer checks. The company made that announcement stating that it would need users to provide evidence of their identities with immediate effect.
Sudden Regulatory Changes
The decentralized exchange platform highlighted all these changes through a blog post earlier on October 1. With the company citing regulatory issues, it wrote:
“… starting October 2019, all existing and new users are required to submit user verification before continuing to use deposits and withdrawals, to protect customers and CryptoBridge from being held responsible for any illegal intentions or money laundering activities.”
CryptoBridge Exchange alleges that it was forced to act according to the 5th EU Anti-Money Laundering Directive. The abrupt nature of this announcement has understandably angered most of the crypto advocates. The new regulation forces all users who might have deposited at the exchange to provide their identification documents before getting their money back.
— ☕CRYPTO. COFFEE.☕ (@overheardcoffee) October 1, 2019
The main cause of complaint is that the users were not even warned in advance about the introduction of the new KYC needs. Most of the notable responses to the exchange’s tweet that had the blog post drew extensive attention to the underhand move. Some users now suspect an exit scam while others just vow to never use this platform again.
After some investigations, it was evident that the changes highlighted in the blog post had indeed gone into effect. After signing up for an account on the platform, users are immediately informed that they must complete the Know-Your-Customer checks.
Anyone who deposits their money on this platform must provide their identification details before they are allowed to withdraw the money. Nobody is allowed to withdraw their money until they provide their proper identification details. Whether the account is new or old, they are all subjected to the same extensive checks.
Is this a centralized decentralized exchange?
The introduction of such abrupt freezes on user withdrawals points towards a high level of centralization on the supposed decentralized platform. That compounds onto the injustice for those that have their crypto funds trapped on the CryptoBridge platform.
But but.. who I send my details to if this shit is decentralised?
— NANOissuperior (@nanoissuperior) October 1, 2019
Users and the general crypto community are disgruntled about this hypocrisy portrayed by the exchange’s new policy.