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First and foremost a shoutout to my friend TooFastEddie on Noise for bringing this to my attention in the first place. On the one hand I am pissed at NEXO for starting to require KYC. On the other hand I am glad they are at least giving me enough time to get my funds out before they change the rules.
KYC for those who don't know stands for: Know Your Customer.
What is practically means is that the company (NEXO in this case) needs to know identifying information about you for tax purposes and to follow local/country guidelines in regards to crypto. So they most often require your Drivers License number and home address and phone number. Sometimes they will even require to take a photo of your face with your License and send it to them.
Guys I am not a conspiracy theorist but I do also don't feel comfortable giving all this information to a company that truly hasn't proven themselves. Crypto companies go under every day. And I don't trust most of them to NOT sell my data off to someone for quick cash. I am a firm believer in anonymous benefits of Blockchains. I am also a firm believer in not paying taxes on 1's and 0's on the internet until I turn those 1's and 0's into actual fiat.
I have been staking with NEXO for a good while now because their first tier did not require KYC. If you wanted to enable more features or enable a higher return on your staking then you would need to do KYC but for the little guys like me, it was perfect. Until now that is.
Here is the e-mail I got from NEXO yesterday....
At first glance it looks like they just want you to to verify certain things in your profile maybe. Like maybe you just need to update your location or 2FA, something like that. However as you scroll down you will see this:
This is where the poop hits the fan for me. I loved Nexo because it didn't require KYC. Now it looks like it is mandatory. Starting February 10th (yesterday) they new KYC standard went into place. What is nice though is that upon opening the app it doesn't bombard you with notifications to do this. However that also scares me. Unless TooFastEddie posted about it in Noise I would have never known about this.
The 1 good coming from this is that you have until March 25th to complete the KYC. Which means if you are staking your crypto with NEXO on the 1 month active term right now, it will end before March 25th (unless you have it setup to auto renew). If you have your setup for Auto-Renew and don't want to KYC please turn off Auto-Renew on your active terms.
And a little further down you see that you will most definitely need to take a picture of your ID and your own face so that they can compare the 2 items for authenticity. What is interesting is that the United States IRS just announced they would stop require selfie photos to authenticate your IRS account due to backlash. Yet all these KYC sites still require it, which is annoying.
If you fail to verify before March 25th, 2022, 21:59 UTC, your Nexo account will be restricted to withdrawals and repayments only...
That is great news. So even if you forget to turn off auto-renew or just log back into your Nexo account after months away and didn't know Nexo was requiring KYC you will still be able to withdrawal you crypto without completing KYC. This can not go understated that this is amazing. Most sites won't let you withdrawal without completing KYC so kudos to Nexo for this change at least.
And the e-mail ends with a plea to do the KYC so that you can "make the most of your crypto with maximum protection for your assets". Which honestly is a load of cow dung. Let's be clear here. KYC is not for your own account safety. KYC is so that a company can report income and such to countries and governments. It is so that they themselves do not get in trouble. The trouble would be passed to it's customers. It is one of the reason's I am completely against KYC for crypto site and projects.
To me KYC is the kiss of death. If a site (like Nexo) enables KYC I am getting out as soon as I can. I know not everyone feels the same as I do and that's okay. But please look at the bigger picture here. KYC isn't inherently bad at all. How and Why it's implemented and for whom it's implemented is why I think it's bad.
