Cryptocurrency exchange accused of encroaching on users' personal data and cooperating with authorities

The cryptocurrency exchange dYdX has caused a wave of outrage among members of the cryptocurrency community by launching a bonus promotion — representatives of the exchange promised to pay $ 25 to anyone who sends their photo.

As it became known, on September 1, dYdX launched a promotion under which users had to deposit $ 500 to their exchange account and pass verification by sending a selfie, and if all the requirements were met, each exchange client would receive $ 25. The $ 500 deposit had to be made to USDC in one transfer. After verification, the exchange credited the bonus, and the funds received could be withdrawn immediately with the deposit (total: $ 525).

However, members of the cryptocurrency community were outraged by the need to send their photo — a «liveness check». «dYdX used to be honest about decentralization. Now they bribe users to scan their faces. They even call it a promotion,» one user tweeted.

Some tweeters are convinced that dYdX representatives are cooperating with regulators and handing over personal data to the US government. However, the exchange denied such accusations, emphasizing that the photos are only needed to fight cryptocurrency fraudsters.

Obviously, dYdX’s bonus campaign failed. The question of where exactly and for what purpose the exchange representatives will store their customers' photos remains open.

By the way, in early July, Coinbase denied similar accusations. The day before, the media reported that Coinbase transfers customer geolocation and transaction histories to the US Immigration and Customs Enforcement (ICE). According to the Tech Inquiry research group, in August 2021, Coinbase sold ICE a license to use analytical software. A month later, the exchange signed an agreement with the government to transfer the software worth more than $ 1 million. As a result, the US authorities gained access to various functions of the Coinbase Tracer user data tracking platform.