Cryptocurrency payment processor BitPay is introducing new identity verification measures for certain high-value payments, refunds and payouts.
According to an Aug. 1 announcement from the United States-based firm, the new measures notably do not apply to person-to-person payments using the BitPay and Copay apps.
Photo ID, Social Security number
BitPay is rolling out its new ID verification flow as part of a new BitPay Dashboard, which will function as a personalized home page that provides access to users’ transaction histories and various payment features.
With the launch of BitPay ID, users will be required to undergo a one-time verification process that requires the input of data such as their Social Security or passport number, as well as a photo ID.
The requirement applies in cases where users attempt to make a high-value payment of $3,000 or more to a BitPay merchant, to request a refund of $1,000 or more, to receive BitPay payouts or to get a BitPay prepaid product. The announcement notes that:
“This process helps us improve our identity verification efforts and reduce payment risk for BitPay's merchants. It's also a requirement for us to be able to offer verified users future services like Bitcoin payouts, or faster onboarding for people who want to get BitPay prepaid products.”
According to BitPay, thresholds for payments and ID requirements have been live as of Aug. 5.
Centralized data storage
While BitPay provides users with a link to its privacy policy, the new measures have been met with some scepticism given the resistance that many in the cryptocurrency community have toward seeing their personal data stored in centralized troves.
The developer of open-source BTCPay Server — which was launched as an alternative to BitPay and memorably vowed to make the latter obsolete — tweeted that he was “shocked! SHOCKED!” at the new measures’ introduction, to which one commentator responded:
“Imagine being Bitpay. Your investors deserted you, bitcoiners despise you, now bcasher as well while the regulators bully them everyday. I am almost feeling sad for them ... Almost.”
Many still remember the 2015 hack of the firm, with losses tallying 5,000 Bitcoin (BTC) worth over $1.8 million at the time.
Earlier this month, news surfaced of a possible hack involving the theft of a major swathe of a crypto exchange Binance’s Know Your Customer data (10,000+ personal photos).