Personal Data Protection Authority (KVKK) justified the processing of members’ identity and photo information (KYC) on cryptocurrency platforms, based on the Law on Prevention of Laundering Proceeds of Crime. This decision expands the data processing authority of exchanges, making the member verification process more challenging. Here are the details…
KVKK made a precedent decision about cryptocurrency platforms
KVKK’s decision stems from a complaint filed by a citizen who claimed that he was asked for his identity information when signing up to a cryptocurrency platform. According to the incident, the complainant requested to increase his membership level on a crypto platform, and the platform then asked him for a passport photo as well as the front and back of his identity card.
The person, who claimed that an excessive and disproportionate amount of personal data was requested by the crypto platform, filed a complaint with KVKK and requested an investigation within the scope of the Personal Data Protection Law No. 6698 and the deletion of the processed information. KVKK set a precedent by stating that the crypto platform has an obligation to process personal data within the scope of the Law on Prevention of Laundering Proceeds of Crime No. 5549, and found the data request and processing to be lawful.
No legal action required
The institution stated that the request for deletion of the complainant’s personal data should first be forwarded to the cryptocurrency platform as the data controller. KVKK concluded that there was no need to take any action in this regard. This decision expands the data processing authority of crypto platforms. As a result, these platforms will now be able to request ID and photo information from members to complete the registration process and increase their membership level.
While this decision represents an important step for cryptocurrency platforms in fulfilling their obligations regarding the prevention of financial crimes, it also raises concerns about the protection of personal data. Concerns regarding the protection of personal data include the potential for misuse of identity and photo information by crypto platforms, the sharing of this information with third parties, and the storage of this data for a long time. To address these concerns, crypto platforms must take necessary measures to ensure the security of personal data, including implementing technical and administrative measures, processing personal data only for limited purposes, and ensuring that necessary security measures are taken when sharing personal data with third parties.
Will this development affect the market?
The impact of this decision on the cryptocurrency market could occur in several ways, such as complicating membership processes for platforms, reducing trust in cryptocurrency platforms, and potentially slowing the growth of the crypto market. The significance of these impacts will depend on how cryptocurrency platforms adapt and comply with this decision.
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