In general, interaction with cryptocurrencies on popular exchanges can hardly be called anonymous. The fact is that in the middle of last year, trading platforms undertook to implement an identity verification system or so-called KYC procedure, which involves revealing the user’s identity. This requires showing one’s documents and confirming one’s country of residence. The latter is usually made possible by appropriate bank statements.

In particular, at the end of July 2021, a mandatory KYC procedure was announced on the Binance exchange. Otherwise, users could not withdraw cryptocurrency outside the exchange. The restrictions imposed led to the loss of approximately 3 per cent of the total number of traders on the platform.

Changpen Zhao, CEO of Binance

Now, additional issues with crypto withdrawals can also arise with a verified account. However, for now, such innovations only affect a small number of countries.

Cryptocurrency anonymity issue

According to journalists at the Cointelegraph news outlet, the new rules will take effect on April 1, 2022. Users in Singapore and Japan will have to provide more details about the recipient for any off-exchange transactions, while Canadians will have to do without it for transfers of coins worth C$1,000, which is the equivalent of $801.

The screenshot below shows a list of information about the recipient of the transaction for Canada: the full name and exact address. This is required even if the user transfers coins to his or her crypto wallet outside the exchange. For the Japanese, the requirements are identical, but there is no maximum threshold below which the anonymity of the recipient can be maintained.

The restrictions for Canada seem predictable. Recall that in February there were massive strikes in the country, amid which the authorities allowed the freezing of protesters' funds. The list of such assets included cryptocurrencies, which were actively used to finance those disgruntled by the government's actions. Read more about the story in a separate story.

Data form for Canadian users

Users in Singapore will have to report in a similar manner. However, in this case they are not required to provide the full address of the recipient – they just need to specify the country. Below is a screenshot of the forms for the recipient of the transaction. When transferring to another exchanger’s wallet traders will also need to specify its name.


As a reminder, this is not the first time Coinbase has been in the spotlight for cryptocurrency users. In particular, in the first half of March, exchange representatives reported blocking more than 25,000 accounts. All of them were associated with Russian citizens who were carrying out illegal activities.


Data form for users from Singapore

If Coinbase users from the aforementioned regions fail to disclose information or provide inaccurate data, transactions will be cancelled. When moving to a country that is not subject to restrictions, the trader must change the appropriate item in their account menu.

In essence, the new procedure only adds inconvenience to the users and extra time. At the same time they did not have complete anonymity as Coinbase requires passing through identity verification procedure similar to most trading platforms.


We believe that such innovations are just another reminder that it is better to keep most of your coins in third-party wallets. After all, in case of problems, exchanges can simply freeze coins and cut them off from the owner. That said, cryptocurrency, as we already know, is capable of helping users even in the most difficult situations. So in this case, you should at least think about keeping a certain amount of crypto off exchanges - especially if it is not used for active trading.


What do you think about this? Share your opinion in our millionaires’ cryptochat. We’ll talk about other topics related to blockchain and decentralisation there as well.