Crypto community lambasts dydx’s new facial verification requirement
Decentralized central dYdX (DYDX) has discontinued the new $25 deposit promotion citing “overwhelming demand”, and dismissed claims that the DEX now required users’ verification.
Due to extremely overwhelming demand for the $25 deposit bonus promotion, we are ending the promotion effective immediately. Thanks to the many thousands of new users who came aboard dYdX today. We really underestimated how much interest the campaign got.
— dYdX (@dYdX) 1 September 2022
DEX had drawn the ire of the crypto community after it asked participants of its $25 deposit bonus to perform a “liveness check” in which it scanned users’ faces.
dYdX does not require users to provide personal information, period. We recently launched a promotion that awards $25 when a new user makes a qualifying deposit. Participation in the promotion is completely optional and requires photo verification only to prevent fraud.
— dYdX (@dYdX) 1 September 2022
According to dYdX, the request for facial verification was to prevent fraud and does not signify a “change in (its) ideological beliefs about accessibility, transparency, mutability or censorship” – as it is optional.
The crypto community bashes dYdX
Many in the crypto community believe that the decision to stop the campaign was due to the heavy backlash that the exchange received over it in the first place.
Several crypto industry stakeholders had reacted negatively to dYdX inquiries, with some suggesting the exchange was acting on instructions from regulators.
Actually, it’s ridiculous to assume that a crypto exchange paying people to scan their faces is for any reason *other than* some form of regulatory compliance, or at least testing a mechanism that they plan to expand in the future.
— Chris Blec (@ChrisBlec) 1 September 2022
One user described The $25 bonus as “an insultingly small amount to pay for people to dox themselves.”
$25 is an insultingly small amount to pay for people to dox themselves. I don’t think your values align with your user base. Make it better.
— tomato.eth (@thefaketomato) 1 September 2022
Corey Miller, a growth manager at dYdX, said, “there are no good decentralized identity solutions that exist today,” adding that if DEXs wanted “to become as big as the CEXs,” there would always be “tradeoffs. “
There is a bigger problem here, which is that there are no good decentralized identity solutions today. It’s a huge market and I look forward to creating better tools in the future
— Corey Miller (@coreyj_miller) 1 September 2022
Meanwhile, Adams Cochran noted that DEX had “some legal reasons for them to justify blocking – but biometric collection is never acceptable.”
1/8
Very disappointed to see $DyDx going this way.
There were some legal reasons for them to justify some blocking – but biometric collection is never acceptable. pic.twitter.com/OcHnbCw8Cp
— Adam Cochran (adamscochran.eth) (@adamscochran) 1 September 2022
Others also shared similar views and described it as a bad idea. The crypto community’s paranoia is in light of recent sanctions against Tornado Cash by the US Treasury Department.
DEX’s native token, DYDX, was up 1.5% in the last 24 hours – trading at $1.53 at press time.
