Many visit multiple websites daily and sign up for services without reading the privacy policy. Whether joining 777 Bet Casino or a cryptocurrency exchange, you should understand how those sites secure and protect your data.
In most cases, crypto platforms collect tons of personal data from users. Though this isn’t abnormal, it does make you wonder how they protect it from hackers.
Major crypto services are subjected to regulations and laws that require them to perform KYC (know-your-customer) checks on new clients. This often means users are providing photo IDs, short videos of themselves, and more.
Typically, crypto platforms accept fiat payments from credit cards and bank accounts. Therefore, they’re processing that information and sometimes taking tax IDs. They also collect addresses, employment data, phone numbers, etc.
Understanding how companies handle a user’s data is crucial. Privacy policies are the top way to do that, and here are how various cryptocurrency exchanges protect your information:
Financial Storage and Data Usage
Most crypto platforms must disclose how they receive and store a user’s financial data, but they do so in different ways. Bank account numbers are just one form. However, Poloniex, BitMEX, Binance, and OKX didn’t mention what information they collect in the privacy policy.
Paxful only mentions it might store financial information if users send it to trading counterparts or chat about it online. BitMEX claims it doesn’t have a fiat payment gateway, so it won’t receive or store banking or credit card data. Ultimately, people purchase USDT or XBT through Banxa.
Likewise, Poloniex claims it doesn’t directly deal with fiat currency, so it doesn’t store banking/credit card information in its system. OKX said roughly the same thing because third-party payment providers handle that aspect.
Binance claims that it will process banking information only when users choose to share it. Overall, it’s not mandatory data to open an account with the crypto exchange.
Third-party Access to Data
Traditionally, crypto services require multiple partners to process trades and maintain their websites. Therefore, they must share user data with those third parties. Likewise, various companies have different transparency levels about how that information is processed and accessed.
Some companies mention they could or may share data with other third parties. Others will provide explanations and names with various degrees of detail.
For example, BitMEX and Bitfinex provide a long list of counterparties with which they could share information. The latter includes this in the privacy policy, while the former has a dedicated page of data partners.
Europe-based platforms often mention if they must transfer information to companies outside the EU and how it’s secured. Ultimately, they must follow the GDPR (General Data Protection Regulation). Those in California, USA, have the CCPA (California Consumer Privacy Act) to protect them.
Data Gathered from All Third Parties
To ensure they know enough about the users, platforms often gather information from outside sources. These might include social networks, government organizations you’re affiliated with, banks, and third-party providers offering identity verification services.
Overall, Gemini has an exhaustive list of outsider sources from which it might gather information about users. Most companies simply mention that they could look you up in sanctions directories, public court documents, and anti-fraud databases. Likewise, they mention credit bureaus and other government bodies.
Why Crypto Exchanges Share Information with Government Agencies
Most cryptocurrency exchanges are closely watched by regulatory bodies worldwide. They are often asked to provide information about users if the authorities suspect illegal activity, such as money laundering or tax evasion.
Companies that collect such information can and usually do share that data with governments. In most cases, no warrants are required.
People are often wary of companies collecting and sharing personal information with the government. Therefore, exchanges usually disclose the number of requests they receive from the authorities.
You want to ensure that companies will stand up for you and other users. Are they being transparent about any requests they get from the government? Will they require a warrant or voluntarily turn over that information?
The most infamous case of a government body gaining access to people’s personal information was in 2018. Overall, the US IRS (Internal Revenue Service) received data on roughly 13,000 Coinbase users. There was a lengthy court fight between the entities.
Blockchain.com is a crypto wallet provider and exchange that claims it requires authorities to present a warrant or court order before accessing a user’s data. However, eToro says it provides information to government agencies without being compelled to do so.
Bitfinex has an entire website page explaining how it handles requests for user data from law enforcement.
Overall, it’s impossible to predict how specific platforms might act in real-life situations. If a regulatory body knocks on the proverbial door, they might fold if threatened with a shutdown. Likewise, crypto regulation continues to evolve, so the rules might change in the future. However, the way the exchange describes its approach can help you determine if it’s fair.
Data Retention
You also have to pay attention to how long the information is stored on the servers after you’ve severed ties with the exchange. Typically, this is the “data retention” part of the privacy policy.
Usually, cryptocurrency exchanges take five years to fully erase a user’s data when they close their account. Still, they might keep the information longer if there’s an ongoing investigation.
Bitstamp and Bittrex both claim that they keep user data for up to 10 years once the account is deleted permanently. However, the former says it destroys all biometric information after completing its verification process.
LocalBitcoins and Coinbase offer more detailed descriptions of how long they’d keep different data types. The former also specifies that if users never use its platform to trade, the information could be removed in 13 months instead of five years.
Final Thoughts About Security Measures from Different Crypto Exchanges
Before doing business online with any company, it’s important to read its privacy policy. Understanding how it stores, protects, and gives out your personal information is crucial.
Choosing a reputable cryptocurrency exchange is essential. One aspect of that is knowing how it works for you. Focus on retention rules, third-party access, and storage of information. Be wary of data breaches and learn how you can protect yourself online.
