A Canadian bitcoin broker was defrauded by a customer who paid for bitcoins by cheque. The transaction appeared as two ‘deposits’ on the broker’s bank account, at which point the broker thought it was safe to deliver the bitcoins to the buyer. He did so, then the bank changed the status of the deposits as they discovered that the cheques were written from an empty account. The broker is suing the bank in question, TD bank, for the CAD12k loss. TD Bank suggested a settlement of CAD500, which the broker refused.
Fraud is the biggest reason to have extremely strong Know Your Customer (KYC) procedures. VC Exchanges and Brokers view KYC as a hindrance. No. It protects your business and protects you. If you need help making your KYC watertight contact Diacle for support.