Major global cryptocurrency exchange Bitstamp continues to step up its compliance efforts by requiring its users to provide more data such as their source of wealth.
In an email notification to users on Wednesday, Bitstamp updated its customers on ongoing policy upgrades on the platform, with the exchange seeking additional information about its customers, a Bitstamp user told Cointelegraph.
The email is:
“We are working closely with our regulatory partners to ensure we continue to be your trusted exchange. This requires updating your account information to provide you with the latest products and crypto assets.”
Bitstamp specifically requested users to update the provenance of cryptocurrencies stored on the platform for regulatory purposes.
The exchange provided an official list of examples of documents clarifying fiat-related sources of wealth from deposited funds, including salary and pension payment slips, inheritance documents, payslips for savings, gifts, mining receipts, and others. Crypto-related sources include fiat and crypto deposits and withdrawals, credentials, employment contracts, screenshots, handwritten agreements, and others.
The exchange now also requires its customers to provide some legal information such as nationality, place of birth and tax residency. In addition, the exchange requested information such as annual income and net worth, intended activities on the platform, annual deposit estimate, as well as the origin of wealth.
Before sending out the latest notice, Bitstamp reached out to its users on March 30th and promised rewards for providing more account information:
“If you wish to continue using our services, you will need to update your account as some information is out of date. As ‘Thank you!’ We’ll reward you with a $25 bonus once you fill out your account information.”
Those who haven’t updated the account not only missed out on the bonus but also risk not being able to withdraw their funds from Bitstamp at all. According to social media reports, Bitstamp eventually disabled all cryptocurrency and fiat withdrawals for its European customers who failed to prove the origin of their crypto on the platform.
The exchange is now reportedly asking users to provide documents on where they got the crypto they deposited on Bitstamp, which only applies to cryptocurrencies purchased on external exchanges.
The community has expressed outrage at Bitstamp’s policy changes, with people complaining that Bitstamp didn’t give them time to withdraw their crypto before announcing the new rules. “You just can’t make new rules when people have already deposited their cryptos. If you want to change the rules of the game, at least give them a deadline beforehand,” wrote one Redditor.
“We understand that not everyone is comfortable with providing so much information, and we particularly understand that it is very inconvenient to do so. However, please understand that if we are to continue offering our services to you, we need to comply with the requirements of our regulators,” wrote a Reddit user named “Lucas from Bitstamp” in the thread.
Bitstamp did not immediately respond to Cointelegraph’s request for comment. This article will be updated in anticipation of new information.
Related: Crypto industry hits back after EU vote to block ‘unhosted’ wallets
The recent restrictions on Bitstamp aren’t the first time the exchange has taken know-your-customer (KYC) measures. The company previously implemented somewhat strict policies on withdrawals by its Netherlands-based users, banning withdrawals to external wallets from unverified addresses.
As previously reported, in late March, European regulators attempted to amend the European Union’s money transfer regulation, proposing to report all crypto transfers over 1,000 euros ($1,086) to the relevant authorities.
Additional reporting by Tom Farren.
https://cointelegraph.com/news/bitstamp-asks-users-to-update-the-source-of-their-crypto-citing-regulatory-compliance Bitstamp is asking users to update the source of their crypto, citing regulatory compliance