Coinbase To Verify Your ID With Live Webcam

The newly licensed Coinbase is the common ground of what to expect from centralized bitcoin exchanges. This is not only true in the US, but anywhere regulation forces exchanges to serve the state and fraternal banking system from which bitcoin exits.

It’s no surprise that decentralized exchanges, like Localbitcoins, are breaking their own volume records on a weekly basis. Peer-to-peer exchanges are not perfect. But for the cautious and informed, they are a return to the privacy and financial freedom that have made bitcoin such a beacon.

Also read: Norwegian Prosecutors Seek 120 Bitcoins in Court Judgments

Coinbase Threats

In late February, a Reddit thread on Coinbase broke out. The exchange has implemented a new method for identity verification. The first post in the thread captured the change and the dominant response to it.

Just tried to help a friend sign up for an account and they’re asking for access to her webcam?!?! “We will ask you to take a picture of yourself with your webcam”… .but there is no law or regulation that requires this. I have accounts with 3 brokers, 2 banks and Gemini, and none of them have yet requested access to my computer hardware. Coinbase, what are you trying to pull here? Access to our computer hardware is not required by… laws/regulations. What is your real ending?

Coinbase’s accelerated ID verification is part of its commitment to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) laws – two incredibly intrusive measures that destroy financial privacy. Coinbase’s new verification layer uses facial recognition technology to correlate a real-time live face shot from a webcam or smartphone with an ID image sent at the same time by an account registrant or with data already in the account holder’s file. (The process is pictured here.)

Not everyone seems to be subject to more and more scrutiny. Perhaps those who expressed doubt. Perhaps they belong to a ‘wrong’ category such as ‘non-American’. Or Coinbase may be slowly rolling out this technology to solve the myriad of problems users are facing. One Reddit poster with an existing Coinbase account wrote;

I’ve had an account for three months and suddenly when I access but [sic] add Bitcoin I was taken to a page to re-verify my identity. I did it by uploading my license. This time they made me use the webcam and it took me eight tries because they kept saying it was too dim.

Whatever the reason, and unless there is significant downside, Coinbase is unlikely to waive the process of protecting it from governments and providing data of commercial value. This process is more likely to become the norm for centralized exchanges.

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The long road to finding your identity strip

Coinbase Triple ID Verification Through Direct Webcom, Guarantee Right From Centralized ExchangesThe change has been going on for a while. Jumio, an online mobile payment and ID verification company, announced its new Face Match feature in September 2013. In March 2014, an article on Coindesk announced the Secure Open Network. Jumio’s Bitcoin Identity (BISON) targets a customer base of “bitcoin exchanges, wallets, and ATM providers worldwide. The article outlines future data sharing plans, which may or may not be optional; description is confusing and the data collected is often shared despite assurances to the contrary. The article continues, “BISON client businesses will also have access to regularly updated data regarding success rates, failure rates, account openings, transaction failures, and transaction failures. fraudulent attempts in the network…”

In November 2016, the Biometric Update heralded the innovative combination of Face Match with a focus on Jumio’s bitcoin; Coinbase was specifically mentioned.

Jumio’s Netverify now includes Face Match and ID verification, a three-pronged approach to…[KYC] processed on mobile devices by confirming the identity and validity of the person presenting the ID….[Coinbase can] ensure the person whose ID matches the identity on the card before approving the increased buy/sell limits in the market.

This February, Netverify Document Verification was publicly delisted and was declared “the first web and mobile document verification solution to meet KYC and AML requirements for relevant account information.” fit”. Coinbase rolled out the system that same month, but the exchange doesn’t appear to restrict its application to “buy/sell limit increase” requests.

Centralized exchanges are becoming the powerful arm of the state. They are in a hurry to comply with laws that jeopardize the privacy and protection of their customers.

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Unbearable light of peer

Coinbase Triple ID Verification Through Direct Webcom, Guarantee Right From Centralized ExchangesMy experience of opening a Localbitcoins account is quite the opposite. It took me less than two minutes yesterday morning to check in. A follow-up email contains a link to click on and form unique ID verification. Presumably, an anonymous but valid email address would suffice. In a February 12, 2017 article on, Jamie Redman added, “There is an option to upload a state-issued identification card, license, and phone number. Verification of these IDs adds confidence to the buying and selling process as far as reputation is concerned. However, users can opt out of these verification processes and still conduct transactions on the platform.”

How do Localbitcoins work? Founded in 2012, it is a type of Craigslist that connects individuals in certain areas who want to sell or buy bitcoin. Sellers advertise on the website where they state details such as the sale price and accepted payment methods. The buyer responds and meets the seller in person with cash or alternative payment arrangements – for example, via Paypal, gift cards or Western Union. Localbitcoins provides escrow and conflict resolution services as well as a feedback mechanism by which traders can be ranked.

As of August 2016, approximately 1.35 million members have been registered from 249 countries, and the weekly trading value exceeds $14 million.

Localbitcoins is not the only peer-to-peer exchange. Three others that are often mentioned are Bitquick, Bitsquare, and Wall of Coins.


Any transfer of wealth involves risk. Peer-to-peer forums are rife with scam stories, but then so are the forums on mainstream exchanges. Coinbase has been accused of arbitrarily closing accounts and canceling transfers when bitcoin price changes are detrimental to it.

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But the biggest risk is the regulation of bitcoin, which culminates when governments, like Venezuela, crack down with force. The biggest threat to financial freedom is the alliance of governments and central banks, both of which need your cooperation and data to function effectively. Centralized bitcoin exchanges are rapidly becoming a means to collect both. They are quickly becoming banks.

What do you think about centralized exchanges and enhanced verification practices? Let us know in the comments below.

Image by Shutterstock and Pixabay.

Cards in this story

AML, BISON, BitQuick, Bitsquare, Central Bank, Coinbase, Government, ID Verification, Jumio, KYC, LocalBitcoins, Wall of Coins

Need to calculate your bitcoin holdings? Our test tools section.

Wendy McElroy

Wendy McElroy is an individualist and anarchist Canadian. She co-founded Voluntary and Modern Movement magazine in 1982, authored more than a dozen books, wrote dozens of documentaries, worked for several years for FOX News, and wrote hundreds of articles in periodicals from academic journals to Penthouse. She has been a vocal defender of WikiLeaks and is headed by Julian Assange.

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