Complying With Laws, Coinbase Introduces ID Verification for Bitcoin Exchange

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Complying With Laws, Coinbase Introduces ID Verification for Bitcoin Exchange
Complying With Laws, Coinbase Introduces ID Verification for Bitcoin Exchange

After facing a lot of flak from the government authorities, Bitcoin exchange organizations such as Mt. Gox started ID checks for purchases. Now, it is Coinbase which has introduced checks and balances wherein it will ask for ID proof from the buyers or sellers wanting to buy relatively large volumes of Bitcoin at high speed.

Levels for Bitcoin Buyers and Sellers

Coinbase has set various levels for buyers when asking for ID proofs. A source from the organization informs that the normal “level 1″ users can buy up to 10 Bitcoins a day and sell up to 50 without submitting personal details. He also informs that such buyers or sellers will however need to wait four business days for the completion of transaction.

On the other hand, if they submit an ID proof and become a “level 2″ user, they can buy up to 50 Bitcoins without any delay. According to Coinbase co-founder Fred Ehrsam the measure on the part of the company is to enhance anti-money-laundering, which can be done only when there are tough checks on the buyers and sellers of Bitcoins.

Additional ID Proof for Level 2 Customers

He says that the extra ID information for level 2 users is possible only when an individual submits proofs for date of birth, address and the last four digits of their social security number. The measure from the organization aims to enhance Bitcoin’s legitimacy which has been undermined a lot by the anonymous transactions; the government authorities claim that it is being used for money laundering.

Efforts are being put to discourage money laundering and make transactions transparent for the government agencies. Coinbase will ask its more than 180,000 users to be linked with normal bank accounts so that they can purchase and sell Bitcoin.