The Lie: “If you’re unable to verify your identity, you can exit and continue using Coinbase. However, you won’t be able to trade crypto until you’re verified.”
Know Your Customer (KYC) & Coinbase?
KYC, also known as “Know Your Customer“, is a procedure financial institutions follow to determine a customer’s identity. KYC is the first step in AML (Anti-Money Laundering) inspection and helps financial institutions such as banks and crypto exchanges determine the level of risk associated with a customer or if such a customer is a criminal. Cryptocurrency exchanges also require KYC to comply with AML regulations.
Who is Coinbase?
Coinbase is a cryptocurrency exchange where you can buy many cryptocurrencies, including Bitcoin and Ethereum. They currently support over 120 cryptocurrencies, though several are not on the Coinbase crypto exchange. Coinbase’s simple and modern user interface, coupled with the fact that they support the most popular cryptocurrencies, makes it a popular choice for newbie and experienced crypto investors.
My reason for trying to remove my funds from Coinbase
FTX was founded as a cryptocurrency exchange in 2019 and gained over 1 million users by 2021, becoming the 3rd largest exchange by volume and earning over $1 billion in revenue. Sam Bankman-Fried is one of its founders and chief executive of the company (CEO). He became highly influential in American political circles, appearing even on the cover of Fortune. In November 2022, FTX filed for bankruptcy, and Sam Bankman-Fried’s net worth of $26 billion fell to $0 almost overnight.
FTX went from a $32 billion valuation to bankruptcy in days as liquidity dried up, customers demanded withdrawals, and rival exchange Binance ripped up its nonbinding agreement to buy the company. FTX founder Sam Bankman-Fried admitted on Thursday that he “f—ed up.” You can find a full article on FTX or watch this video.
My Know Your Customer (KYC) verification Experience
I have been a Coinbase customer since 2020, and I am currently based in Germany. After hearing about the bankruptcy of FTX Exchange, I finally decided not to be lazy and move most of my crypto from Coinbase into cold storage (an external device like ledger Nano X that you own that stores your crypto).
I logged into my Coinbase account and got a notification window to get KYC verified to remove the trading limit, which was described as optional. Even though I had tried this process in the past, and it never worked, I tried it again, assuming they fixed the issue, and if not, I could always opt out. Oh, was I wrong!
On the Coinbase app, I clicked on the notification and was taken to the KYC verification pop-up on my phone app. I logged into my bank account, but I couldn’t get the IBAN from SolarisBank (Coinbase Germany’s verification bank) to complete the verification. I ended the process by closing the app, as the pop-up had no close button, which I found strange.
Upon restarting the app, I got an automatic pop-up covering the whole app screen, asking me to complete the KYC process, also without an opt-out or close button. This worried me, as in previous verification trials, there was a “close button” on the Coinbase KYC verification pop-up.
It’s been impossible to reach anyone on Coinbase live support. Their email support has no topic relating to KYC verification issues, so I chose verification to create a ticket. I am yet to receive a response on that specific ticket.
After trying Coinbase US and UK phone lines unsuccessfully, I contacted Coinbase German phone support again, where the person I spoke with seemed not to understand my plight. I continuously tried to explain to her I was an already verified customer, but I curiously tried the KYC verification, and now I am locked out of my account with a big pop-up. I sent Coinbase support screenshots of the misleading pop-up, which states clearly, If you’re unable to verify your identity, you can exit and continue using Coinbase.” However, you won’t be able to trade crypto until you’re verified.”
My general experience with Coinbase phone and email support wasn’t good. They never once mentioned KYC during our communication nor acknowledged that I was a verified customer, even after submitting several emails to confirm this. No one apologised for the misleading notification or pop-up I received or days lost not having access to my account.
Coinbase’s support does not unfortunately have the training or capacity to understand the importance of user psychology in the crypto space. People are touchy with their investments, especially if a supposedly reputable crypto exchange goes bankrupt. That said, I don’t blame them; Coinbase management could have done better in training them or, in this case, being more transparent to its users.
Verification Fix For German Customers
This fix helps you finish the verification process using IDnow if the automated bank transfer doesn’t work. I got this information through my email correspondence with Coinbase support. Follow these steps:
You can find a list of all supporting documents here. To get started, follow the steps below. Although this process can be completed from a web browser via a webcam, using the app is preferred.
- Tap Identify via video call.
- Copy the ID reference code shown on the screen.
- Download the IDnow (not sure if this works for all EU or just Germany) app and paste the code into the app when prompted.
Know Your Customer (KYC)
- Select Identify via video call.
- Enter your phone number to have the IDnow app sent to you, or download the mobile app.
- Enter the specific code as shown on the page linked above.
You’ll then be connected to a live agent who will verify your ID.
Coinbase Know Your Customer (KYC) Verification Summary
If you unfortunately click and start the Coinbase verification process, then you will be forced to complete it as of writing this blog. This process has taken a few days to resolve, with me having to complete the verification process forcefully by Coinbase. If Coinbase suddenly had gone bankrupt in between those days, I would have lost everything. I don’t mind the KYC verification, but I am not a fan of bullying. I have moved 95% of my crypto off exchanges onto “cold storage”, and I suggest you do the same.
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