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Crypto users reject dYdX promotion necessitating a face scan

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dYdX set to achieve 100% decentralization after the V4 update
dYdX set to achieve 100% decentralization after the V4 update

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Several crypto community members have rejected the verification process set up by the dYdX decentralized exchange during the sign-up process. On Wednesday, dYdX announced that new users that deposit 500 USDC coins for their first transaction would receive a promotion of 25 USDC if they complete a “liveness check.”

Crypto users reject the dYdX registration process

The exchange said that the verification process would involve accessing the user’s webcam and comparing if the image had been used to create another account on the DEX. The promotional giveaway was voluntary, and many people on Twitter had implied that the move was an invasion of privacy.

The founder of DeFi Watch, Chris Blec, has accused the DEX of manipulating its users by giving them bribes for their faces to be scanned and disguised as a promotion showing that dYdX and other exchanges could give better incentives for their clients to give up more information.

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Blec said that dYdX” s actions were wrong and were misleading users with intent. They said that each face scan collected was from an innocent person. Moreover, a criminal would not face scan, but they can still use the dYdX exchange.

dYdX also reported that after reviewing multiple solutions, the face scans provided a solution that provided the best user interface to show that they were the same person without disclosing their full identity.

The chief legal officer of Polygon, who previously served as the chief legal officer at dYdX, has also said that these checks were incomplete and ineffective without combining the other requirements. However, Blec has also said that the exchange could have been acting on behalf of regulators, or it could be a testing mechanism that would be expanded in the future.

The general partner at Cinneamhain ventures, Adam Cochran, has also opposed the move, saying it was “an absolutely horrible idea.” Cochran said that there was no reason to collect user biometrics.

Move not mandated by regulations

Despite speculation that regulations could have necessitated the move, a spokesperson from the dYdX exchange has said that the verification did not have anything to do with regulations.

The spokesperson said the move was a simple way of detecting whether one was a unique person. However, the platform has not outlined the service for which it would use the facial scans and how the data in question would be stored.

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