He was allowed to take out the first $10K on the first day relatively easily, but after that, the exchange asked for further proof of his identity on each subsequent day. Presumably it was to make sure they weren't being stolen from him by a hacker
I'm not sure on this, but I think the extra precaution is due to "know your customer" rules. If the exchange is suddenly sending $10,000 per day to a bank account, the exchange has to (to some degree) know the customer and be confident that the customer should have this level of money. I think the rules are designed to fight money laundering and stuff like that. If you're going to send $50,000 to your account, you need to prove to the bank that you have the income or assets or something that would fit the profile of a person sending themselves $50,000.
I don't really know if that's accurate, but I think that is an issue for lots of these exchanges. They don't have any real relationship (deposits, credit cards, loans, checking account, whatever) with their customers, so it's easy for them to break the "know your customer" requirement, and then if they are working with thieves/criminals I think the exchange has exposure to some liabilities/penalties..... |
