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Bitstamp asks users to update their crypto source for regulatory purposes

Bitstamp is now requiring users to provide their nationality and place of birth as well as proof of their annual income. Bitstamp, a major cryptocurrency exchange with users all over the world, is stepping up its compliance efforts by asking for more information about their wealth.

For regulatory reasons, Bitstamp has requested that customers update the origin of their cryptocurrencies stored on the platform in an email notification sent out on Wednesday.
Among the documents listed by the exchange were salary and pension payslips, inheritance documents, savings pay slips, gift receipts, mining receipts, and other examples. Crypto-related sources include deposits and withdrawals in fiat and crypto currency, login information, work contracts, screenshots of agreements, and so on.

Legal information such as nationality, birthplace, and tax residency is now required by the exchange. Aside from that, the exchange requested information on annual income and net worth, as well as a projection of annual deposits, and the source of the funds used to make them.
Bitstamp contacted its users on March 30th, promising rewards for providing additional account information:

“If you wish to continue using our services, you must update your account because some information is out of date.” We will reward you with a $25 ( R370) bonus once you have completed your account information as a “Thank You!” wrote Bitstamp.

Those who have not updated their accounts have not only missed out on the bonus, but they may also be unable to withdraw funds from Bitstamp. Bitstamp, according to social media reports, has disabled all cryptocurrency and fiat withdrawals for its European customers who have not proven the origin of their crypto on the platform.

According to reports, the exchange is now requiring users to provide documentation proving where they obtained the cryptocurrency that they have deposited on Bitstamp. This, however, only applies to cryptocurrencies purchased on third-party exchanges.

The community has expressed outrage over Bitstamp’s policy changes, with people complaining that Bitstamp did not give them enough time to withdraw their cryptocurrency before announcing the new rules. “You simply cannot impose new rules when people have already deposited their cryptocurrency.” If you want to change the rules of the game, at least give them a deadline,” one Redditor wrote.

“We understand that not everyone is comfortable providing so much information, and we especially understand how inconvenient it is.” However, please understand that if we are to continue providing you with our services, we must meet the demands of our regulators,” wrote Bitstamp in a thread on Reddit.

The latest Bitstamp restrictions are not the first time the exchange has implemented Know Your Customer (KYC) measures. Previously, the company had somewhat strict withdrawal policies for its Dutch users, prohibiting withdrawals to external wallets from unverified addresses.

This come after European regulators sought to amend the European Union’s Transfer of Funds Regulation in late March, proposing that all crypto transfers exceeding 1,000 euros (R15500) be reported to relevant authorities.

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at [email protected]

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