dYdX Introduces New KYC Verification, Faces Criticism

Decentralized cryptocurrency exchange dYdX has introduced and terminated within a few hours a new know-your-customer (KYC) verification process, which required users to scan their faces using webcam.

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According to a blog post, those users who complete the new verification program, would have got a $25 bonus if they deposit $500 or more. However, a few hours after the program was announced, dYdX had to terminate it, citing “extremely overwhelming demand.”

Although the exchange noted that participation was “completely optional,” it was enough to spark an outcry in the crypto community, as some said dYdX had “nuked itself” with the latest initiative.

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The move comes just a few weeks after dYdX started blocking accounts flagged by its compliance provider for contacting with sanctioned crypto mixer Tornado Cash.

The exchange declined to elaborate about how exactly its provider decides which account should be flagged or not, but acknowledged that “many accounts were blocked because a certain portion of the wallet’s funds were associated at some time with Tornado Cash.”

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