The CEO of Chess.com has claimed, on Reddit, that he was unable to accept over 100 Bitcoin (BTC) payments, because the payments’ values were greater than $10 at current prices. The culprit is BitPay, the website’s payment processor, who have robust Know-Your-Customer and Anti-Money-Laundering (KYC/AML) requirements.
The CEO, Erik Allebest, lamented in a post:
I did NOT know that we can’t receive more than $10 at a time on this account!? It didn’t say that anywhere I saw. Anyway, in order to accept our membership payments I have to send in my personal utility bills or mortgage documents, photos of my drivers license or passport, and a bunch of company documents. That’s super frustrating…
Allebest said that he previously used Coinbase for crypto payments to the site, but gave up because Coinbase’s payments links became “deprecated” - presumably meaning that the links had to be replaced periodically. Regarding crypto in general, however, he remarked that "anyway, I personally remain a hopeful believer.”
A Watchful Eye
BitPay claim that they “[make] use of new technologies such as machine learning and integrating innovative third-party compliance tools” to support their KYC/AML regime.
The tight KYC/AML at BitPay is absolutely no surprise, however, when we consider that they are the only service charged with processing taxes in the US state of Ohio - the only state that has legalized paying taxes with cryptocurrency.
Surprisingly, and in spite of the fact that Bitcoin payments - according to Chainalysis - were down broadly in 2018, BitPay have had a bumper year due to their thriving trade in cross-border business-to-business transactions - taking part of the market away from antiquated international wire transfer systems.
But if blockchain analysis is a necessary part of crypto-businesses’ compliance, it took a potentially dark turn some days ago, as Coinbase acquired blockchain analytics firm Neutrino, whose CEO Giancarlo Russo has a murky past.
His previous company Hacking Team - ironically itself hacked - was found to have built spy- and malware for known human rights-abusing governments.
Defending themselves, Coinbase claimed to be aware of Neutrino’s lineage, but responded that “it was important for Coinbase to bring this function in-house to fully control and protect our customers’ data and Neutrino’s technology was the best we encountered in the space to achieve this goal.”