Yesterday evening we received a legal opinion which lets us consider all cases with clients who haven’t passed the KYC procedure ready to be closed. Therefore, we are releasing this public statement in order to get our position across as clearly and transparently as possible, and also reveal some of our plans for the nearest future.

Here’s a recap of what originally happened:

As an exchange service, we comply with market standards and legal requirements that any exchange service must comply with. We don’t have any mandatory account creation required, however, we have a risk management system implemented — if the transaction is marked suspicious, the user in question is asked to pass the KYC procedure. This is clearly stated in our FAQ, Terms of Use, and Privacy Policy, and one automatically accepts them when using ChangeNOW.

There was a customer whose activity was deemed suspicious by our risk management system. We asked them for their ID in order to pass KYC. They sent us a fake ID which prompted an investigation, during which his funds were frozen on a cold wallet, only to be released when the situation clears up. They sent us another ID later, which was also fake, according to our investigation.

What was our main concern?

The sort of users’ behavior described above is a red flag for our systems, so we had to launch an investigation and make a decision on its outcome, which, in turn, took some time.

What was happening on our side while we were dealing with the problem?

We were checking the documents the user in question sent us in various available databases on the subject of whether they had been blacklisted anywhere;

We had passed this case over to our legal team for them to evaluate our risks in this situation and study all the applicable regulations on whether we would breach any of them by issuing a refund to the user.

We have have started to introduce corrections into our AML/KYC policies. We are still working on them as updates from the market come in. We hope that we’ll be able to present the new edition of the policy soon, that will be as transparent and accessible as possible.

We are continuing to work on communicating our policy to our clients on our website through special messages, notifications, and other interface elements, so that it’s more convenient for our users to use our service and all the information has been presented to them the most accessible and clear way possible.

What conclusions have we come to and what is going to happen now?

We have made several conclusions, a part of which regards our clients who have refused to pass KYC, and another part — our service in particular.

First, the customers who haven’t passed KYC on ChangeNOW:

With the help of our legal team and several independent legal advisors we have come to a conclusion that we can issue a refund subtracting the network fee to the address that has been used to make a deposit without breaching any regulations;

We reserve the right to submit all the information about our clients who have refused to pass KYC that we’ve gathered during the investigation to the police or any other authorities in case we receive a request from them;

If a user is openly refusing to pass KYC, they are issued a refund subtracting the network fee to the address they have used to make the deposit and that address is permanently blacklisted.

About our service:

We have realized that we need to give our users more information on KYC and AML;

We have expanded our Terms of Use with more understandable data on the KYC procedure and its application; now every user has to read and accept the ToU before proceeding with their exchange — that’s mandatory.

We have also realized that the more transparent our service is, the easier it will be for our users to interact with it. Therefore we have added more information about ourselves on the website, such as our registered address, our contacts, etc.

Even though we don’t approve of threats, blackmail, bot attacks and FUD spreading carried out by some of our clients as valid tactics, we are glad to point out that we have received a lot of valuable feedback on making our service better, more transparent, and more understandable during the discussions that he has started. We have already started implementing those ideas, and this process will carry on!

To sum up: