Popular Wallet Provider Coinbase Introduces ID Verification For Transactions

Coinbase, one of the biggest cryptocurrency wallet providers in the USA, has started requiring identity verifications to make transactions (sending and receiving cryptocurrencies) with their service platform. Some users reported the new requirements on the popular social network site Reddit yesterday.
Coinbase is an American cryptocurrency exchange headquartered in San Francisco, California. With a simple approach to the trade of cryptocurrencies, it was founded in 2012 and since then has become popular, amassing more than 20 million users all around the world. It trades more than 200 million dollars daily.
The change in Coinbase’s policy is now reflected in its FAQ page regarding the exchange limits that a user will have when transacting with Coinbase’s wallet service. Before, there was no mention of any requirement to make transactions, but now there is a system of “account levels” that will limit wallet usability and transaction limits depending on your level of verification. For the ultimate level of verification, that allows you to send and receive cryptocurrencies, you need to provide a photo ID to verify your personal information.
This movement is consistent with the actual trends for cryptocurrency exchanges globally. Countries like South Korea have banned anonymous trading and are working with exchanges to enforce Know Your Customer policies, that is when everyone that uses the service has to be identified with official documents upfront; this also helps Coinbase to comply with anti-money laundering requirements. But maybe the principal cause of taking these measures lies in a more trivial thing: Taxes.
Coinbase has already had issues with the Internal Revenue Service before. The government tax watchdog took Coinbase to trial, and the battle in the court lasted more than one year, with Coinbase being forced to deliver the data of 13,000 “high profile” traders. Also, Coinbase introduced earlier this year an integrated online application for cryptocurrency tax consultation and calculation. Paypal, the most popular payment processing service has also changed its policies last month, and only allows verified users to send money using its platform.

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