We get a lot of people asking why it is that they have to jump through so many verification hoops, giving us photos of ID and posing with ID etc just to be able to buy some cryptocurrency.
Like all other (reputable) cryptocurrency exchanges and brokers in New Zealand, we are required to comply with anti-money laundering (AML) regulations.
As well as complying with the law, we also think it’s important for our customers to understand why we do this. While “AML” is the typical explanation used for these checks and processes, there’s more to it than just that. Some of it is about being compliant with the law, some is about protecting our customers, and some is about just being decent people.
There’s some pretty good reasons behind it, so we thought we’d give you a quick run down on why we have to do what we do, and why it’s making things better for you.
Reason 1: Stopping people from stealing your money
There’s unfortunately far too many people out there using scams and fraud to get access to your money. We have to make sure that someone who has gotten fraudulent access to another person’s bank account can’t then use those funds to buy cryptocurrencies through us.
And even if a bank account hasn’t been hacked and someone is genuinely paying us, we need to make sure they know who they are paying to, and what they’re paying for. People can be tricked in to sending us money through what is known a “man in the middle” scam. Imagine some guy called Joe offers to sell you a brand new iPhone for a too-good-to-be-true price – a sweet $500. In the meantime, Joe comes to us and asks to buy $500 of Bitcoin. We give Joe our bank account for payment, he passes those details to you, you pay us for the “iPhone”, we send the Bitcoin to Joe.
Joe walks away with some free Bitcoin, and you’re out of pocket $500. It’s a classic “man in the middle” scam and one of the reasons that we need to identify people who are buying through us.
Reason 2: Stopping people from stealing your kids
Human trafficking, child sexual exploitation and just plain ol’ money laundering. There’s lots of bad shit that people can use cryptocurrency for, and we don’t want to be part of enabling those activities. While the nature of cryptocurrencies can make it hard to trace transactions, international best practice is to control the places where money flows from fiat (i.e. normal money) in to cryptocurrency. We are one of those places, so we have obligations to be able to tell the authorities, if asked, who has been buying through us.
And we will give up that information if requested (see our T&Cs) so if you’re a terrible human being and doing any of those things above, don’t come through us!
Reason 3: Stopping people from stealing your bitcoin
Lastly, we need to know who you are, so that we can give you great customer service. If you call us up because you can’t access your Portfolio, we need to be able to confirm that it’s definitely you calling, and not someone pretending to be you to try to gain fraudulent access to your crypto.
So, while we know that the identity verification process is a pain in the arse, there’s good reasons why we do it. It’s about protecting you and others, and doing our bit to make the world a better place.