One of the oldest crypto exchanges now requires users to provide information such as nationality, place of birth and tax residency, in addition to proof of origin of the cryptocurrency and annual income.
As such, major global cryptocurrency exchange Bitstamp continues to ramp up its compliance efforts by asking its users for more data such as their source of wealth.
In an email notification to users on Wednesday, Bitstamp informed its customers of ongoing policy updates on the platform that the exchange will ask for more information about its customers, one Bitstamp user said.
“We are working closely with our regulatory partners to remain your trusted exchange. To do this, we need to update your account information to provide you with the latest products and crypto assets,” the letter reads.
Specifically, Bitstamp asked users to update the origin of cryptocurrencies held on the platform for regulatory purposes.
The exchange has provided an official list of sample documents clarifying fiat-related sources of wealth for deposited funds, including payroll and pension payrolls, inheritance documents, savings payrolls, gifts, mining receipts, and others. Cryptocurrency related sources include fiat and crypto deposits and withdrawals, login information, work contracts, screenshots, signed paper agreements, and others.
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The exchange now also requires its clients to provide some legal information such as nationality, place of birth, and tax residency. In addition, the exchange requested information on annual income and equity, intended activity on the platform, annual deposit valuation, as well as the source of assets.
Before sending the final notice on March 30, Bitstamp contacted its users promising a reward for providing additional account information:
“If you would like to continue using our services, you will need to update your account as some of the information is out of date. As a token of our gratitude, we will reward you with a $25 bonus after you complete your account information.”
Those who have not updated their account have not only missed out on the bonus, but are also at risk of not withdrawing their funds from Bitstamp. According to social media posts, Bitstamp has disabled withdrawals of all cryptocurrencies and fiat for its European customers who have not proven their cryptocurrency origin on the platform.
The exchange is now reportedly asking users to provide documents proving where they received the cryptocurrency they deposited on Bitstamp. However, this only applies to cryptocurrencies purchased on external exchanges.
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The community has expressed outrage at the change in Bitstamp’s policy, with people complaining that Bitstamp doesn’t give them time to withdraw their cryptocurrency before the new rules are announced.
“You just can’t provide new rules when people have already deposited their cryptocurrency. If you want to change the rules of the game, you should at least set a deadline,” wrote one Reddit user.
Bitstamp does not officially respond to requests from journalists and users for comment, however, one Reddit user named “Lucas from Bitstamp” wrote that these are “forced measures” as such are the requirements of the regulator.
“We understand that it is not convenient for everyone to provide so much information, and especially we understand that it is very inconvenient. However, please understand that we must comply with our regulators if we are to continue to provide you with our services,” wrote user “Lucas of Bitstamp.”
The latest restrictions on Bitstamp are not the first time the exchange has taken Know Your Customer (KYC) measures. The firm has previously had a fairly strict withdrawal policy for users in the Netherlands, prohibiting withdrawals to external wallets from unverified addresses.
As previously reported, at the end of March, European regulators attempted to amend the European Union’s Funds Transfer Regulation by requiring that all cryptocurrency transfers over €1,000 ($1,086) be reported to the relevant authorities.
