Cryptocurrency Funds Trapped by ‘Decentralized Exchange’ Pending KYC Checks

CryptoBridge made the announcement that it would require customers to submit evidence of their identity with immediate effect.

Regulatory Changes for CryptoBridge

The decentralized exchange platform detailed the changes via a blog post earlier today. Citing regulatory concerns, CryptoBridge writes:

“… 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.”

The exchange claims to have been forced to act in accordance with the 5th EU Anti-Money Laundering Directive.

The suddenness of the announcement, which effectively forces anyone that might have deposited at the exchange to surrender their identity before getting their own money back, has understandably angered many cryptocurrency advocates:

This terrible company has essentially stolen all user funds with increasingly hostile practices.
All while claiming to be a DEX.@CryptoBridge how are you going to fix this? https://t.co/0B4BXosegC

— COFFEE CAPITAL (@Crypto_Coffee) October 1, 2019

The most common cause for complaint was the fact that users were not forewarned of the introduction of the new KYC requirement. Many responses to the exchange’s tweet containing the blog post drew attention to the underhand move, with some suspecting an exit scam and others simply vowing to never use the platform again.

We did a bit of investigation and discovered that, sure enough, the changes mentioned in the blog post had indeed gone into effect. After signing up for an account at CryptoBridge, we were immediately greeted with a message prompting customers to complete the KYC checks.

We ignored that and attempted to make a deposit. However, we were greeted with the following message, just as we were when attempting to withdraw. Although we were only able to test this on a brand new account, it seems a fair assumption that the same message is displayed for those with active balances at the exchange platform too:

A Centralized Decentralized Platform?

Along with the obvious injustice for those that have cryptocurrency trapped on the CryptoBridge platform, the introduction of such immediate freezes on user withdrawals clearly shows a high level of centralization on the so-called decentralized platform. One Twitter user amusingly summed up the apparent hypocrisy of the exchange’s new policy:

But but.. who I send my details to if this shit is decentralised?

— NANOissuperior (@nanoissuperior) October 1, 2019

As BeInCrypto previously reported, there were similar fears regarding Binance’s decentralized exchange back at its launch.

What do you think about CryptoBridge complying so easily with regulations? Do you think other decentralized exchanges will follow their lead? Let us know below.

Images are courtesy of Twitter, Shutterstock, CryptoBridge.