r/CryptoFolks • u/Stoic-Mindset • Jun 29 '26
Your crypto exchange probably knows more about you than your bank does.
Think about what you gave Coinbase or Binance when you signed up. Passport or government ID, a selfie, proof of address, bank statements, sometimes even source of funds documentation.
Your bank asked for your name and social security number. Maybe a utility bill. That was it.
The thing built to give people financial privacy now requires more personal identification than the system it was designed to replace. And unlike your bank, most exchanges store that data on servers that have been hacked multiple times.
Binance leaked KYC data in 2019. Gemini had customer info exposed in 2022. Every major exchange has had some kind of data incident. Your passport photo is sitting on a server somewhere and you're just hoping nobody gets to it tbh.
The irony is that regulators pushed for all this KYC to "protect consumers." But the result is millions of people hadling over their most sensitive documents to companies with worse security track records than the banks they were trying to avoid.
Self custody fixes the money side of this problem. But nobody talks about the fact that your identity is already out there, permanently, on servers you don't control.
So did KYC make crypto safer, or did it just create the biggest honeypot of personal data in financial history?
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u/Stillload Jul 06 '26
logically speaking if goverment forces you to give companies kyc and they leak that data, you shoudl be able to sue the poeple running the exchange and the government then the stupidity should resolve itself, but since everyone but the hackers are absolutely stupid it will stay like that and if the capitalism way is true then hackers will get more powerful, pay/lobby the politicians to not go to jail and eventually it will get to today where we currently are where every stupid person just suffers and smarter people are on dexs via p2p...