‘About 100’ Failed Chess.com Payments Via BitPay, Thich KYC/AML at Fault

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…

Erik Allebest

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.”