Coinbase data hack sparks calls to scrap KYC
Coinbase experienced a data breach in December 2024, where illicit actors bribed customer service agents to access personal information of 70,000 users, including government IDs and home addresses. This incident has reignited discussions on the necessity of Know Your Customer (KYC) requirements in cryptocurrency exchanges. Critics argue that KYC fails to protect users while enabling crime, as attackers can easily bypass these checks using AI-generated identities. Despite calls to abolish KYC, it remains a regulatory requirement in many jurisdictions. Alternatives like zero-knowledge proofs are limited by cost and complexity. The breach highlights vulnerabilities in centralized exchanges, with users increasingly exposed to risks. Experts warn that KYC will persist as regulators tighten compliance standards, while users face growing concerns over privacy and safety following the leak of sensitive data.
