Crypto Exchange Digitex Removes KYC to Protect User Data

Digitex, a Seychelles-based crypto derivatives exchange, will start removing KYC identification this week in response to a major user data leakage that happened last month.

Adam Todd, CEO at Digitex Futures Exchange, revealed the news in a public video statement on March 4, declaring that Digitex will have all KYC identification processes removed from its platform as of April 2020.

"As of the end of this week, we're gonna remove all KYC identity verification from every part of our exchange. To buy Digitex tokens from our treasury, you will not need to do KYC. And when we go mainnet in April, there will be no KYC identity verification requirements of any kind to use our exchange."

Specifically, the Digitex exchange is currently running in beta version, only allowing its users to buy its native token DGTX. After the mainnet will be launched on April 27, Digitex will allow users to freely trade between DGTX and Ether as well as other cryptocurrencies, Todd elaborated to Cointelegraph, noting that the exchange will not offer support for any fiat currencies at any time.

KYC removal on Digitex comes on the heels of a major user data breach at the exchange, which eventually led to a compromise of some sensitive data.

As Cointelegraph reported on Feb. 29, the leakage was exploited by an ex-employee of Digitex, who purportedly stole KYC documents such as passport and driving license scans of more than 8,000 Digitex customers.

In a public statement on March 2, Digitex explained that the exchange was initially only aware of the email data leakage.

While Digitex previously hinted at the potential removal of KYC requirements, the firm's CEO bashed the general concept of KYC in his new statement.

Digitex had been trying to adopt KYC because of two major reasons - combating money laundering and allowing United States-based customers onto the platform, the Digitex CEO explained.

When asked whether Digitex expects their user base to grow after the KYC removal, Todd said yes, noting that KYC is a massive impediment for many people to join crypto exchanges as lots of people over the globe don't have government-issued IDs at all.