On Monday, bitcoin exchange Bitstamp issued a reminder to customers that they have three days to verify their accounts. Following that deadline, the company will close the accounts, and government regulatory agencies can seize any remaining funds.
Unverified Bitstamp Accounts Have Three Days to Comply
Nearly four weeks ago, Bitstamp announced customers had until November 13 to verify their accounts or face termination and asset seizure. Bitstamp had tightened their verification policy in 2013, but many users chose not to comply and Bitstamp did not pursue any action against them. However, Bitstamp changed their tune on October 17. As Caleb Chen reported, Bitstamp attests that unverified accounts violate the bitcoin exchange’s “Know Your Customer” and “Anti-Money Laundering” policies.
Failure to [verify accounts] constitutes a breach of our Agreement and failure to remedy that breach. This will automatically result in the following: all unverified accounts holding a balance will be terminated, access rights will be removed, and the holders of these accounts will no longer be considered Bitstamp customers.
Government May Seize Unverified Funds
Moreover, once Bitstamp terminates customer accounts those customers will not be able to reclaim their funds. Rather, since “holders of these accounts will no longer be considered Bitstamp customers,” the company will turn the funds over to government regulatory agencies.
Any remaining balances will be subject to immediate seizure by and forfeiture to regulatory authorities.
Bitstamp not Backing Down from Promise to Stamp Out Unverified Customers
Despite warnings, some customers have still neglected to verify their accounts. Perhaps they were just lazy, or maybe they believed Bitstamp would back down from their threat. However, on Monday the company issued a reminder about the deadline through its social media accounts.
— Bitstamp (@Bitstamp) November 10, 2014
Bitstamp clearly desires to achieve the regulatory compliance necessary to avoid problems with the government. While this is their prerogative, it will surely dismay the multitude of bitcoin community members who desire to trade bitcoins with anonymity and operate outside of government-approved institutions. Current customers now have three days to submit to Bitstamp’s compliance policy or find a new outlet to buy and sell bitcoins.
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Disclosure: The author is paid and holds investments in bitcoin.
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