Gate.io Is Raising Concerns About Easy Identity Verification
ZachXBT, an on-chain detective, aimed to test the theory that crypto exchange accounts give some protection when tracing down stolen cash. To disprove this, he created a Gate.io account under the name Kim Jong-Un with the email address “notlazarus.” ZachXBT took a picture of his application clearance, which showed he had passed KYC and was authorized to trade bitcoins on the exchange.
When stolen funds go to a crypto exchange people like to assume that there is a real person with a real identity tied to an account
To disprove this I was able to create an account on @gate_io and KYC as “Kim Jong-Un” with the email “notlazarus” and within minutes I was verified pic.twitter.com/oCZLK4hBh9
— ZachXBT (@zachxbt) May 9, 2023
It’s unknown if ZachXBT tampered with his ID to get to this stage. Despite this, the results revealed problems in Gate.io’s application process, notably in relation to name verification.
“When stolen funds go to a crypto exchange people like to assume that there is a real person with a real identity tied to an account,” ZachXBT said.
Additionally, the “KYC-1” basic verification layer of the exchange allowed the account user to withdraw up to 100,000 USDT every day.
To emphasize the point, ZachXBT repeated the process with made-up names and names on the Office of Foreign Assets Control (OFAC) sanctions list, as well as email addresses like “harmonyhacker” and “lazaruslover,” all of which were approved, contradicting the notion that bad actors avoid exchanges using. The Lazarus Group is a group of hackers and fraudsters that are allegedly directed by the North Korean government.
As Coincu reported, the US Treasury sanctioned three people for supporting the Democratic hackers Lazarus Group’s conversion of stolen crypto to fiat report for supporting the People’s Republic of Korea’s (DPRK) clandestine weapons of mass (WMD) and ballistic missile programs.
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