Concerns with KYC (Know Your Customer)

I recently read an article regarding the KYC requirement for ICO's. When I first came across the KYC prompt on an ICO I was interested in, I thought to myself why are they asking me for this information? First thing that crossed my mind was "they want to make sure I am eligible to invest by knowing my location (which is the United States)". This thought initially came to mind because a lot of ICO's I wanted to invest in would not allow any U.S. investors to participate due to regulations on private placements of securities. However, prior to KYC requirements, some pre-ICO offerings would ask if you are a resident of [a specific country or region]" and the investor could easily lie and say "no" in order to participate in the ICO.

OK, now since I am now done with my rant about my thought process, we can focus on the issues concerning KYC requirements. Within the past year the rise in fraudulent ICO's has increased exponentially. I will not list all of them but I will leave a link that lists them. Each scam walks away will millions of dollars of investors money and the number increases each day. But, this is my main concern: hackers.

I am specifically talking about the hackers that aim the cryptocurrency exchanges. What is not to keep this individual from hacking an ICO and stealing all of the KYC information obtained? Not only will this person walk away with all investor contributions but now they will have all personal information of each investor. The information ranges from picture identification to addresses to all other personal information that IS more valuable than a coin/token. With all of this personal information being trusted by the company behind the ICO, I feel the investors have every right to know the security measures that are taking place to protect this valuable information.

After reading the article I immediately contacted an ICO that I am invested in via Telegram. I felt I had a legit question and I did not think it would be an issue to ask this in a public forum because every investor has the right to know. My question had a response within minutes and the dev said "[they] do not think it is safe to say what security measures we have in place. Maybe [I] could ask in private?" I responded with "ok I will contact you directly". What is going through my mind is "why would I have to ask in private?" and "shouldn't this be information that each person should know?". Then it dawned on me that scammers are constantly joining these group chats and if they had any insight to the security measure then they could use it against the ICO company to obtain the KYC information. I have yet to receive a response to my email, which was sent a few hours ago.

I would like to know your thoughts and concerns regarding this possibility. I am not trying to create FUD. I am simply trying to make each of you aware of the news that is circulating online. I feel this is concerning and should be addressed. We are not talking about losing your investment anymore. We are talking about having your personal identity stolen. Let me know what you think and I will be sure to keep you all updated on any upcoming news.

---Ledger

KYC Requirements are Making ICO's Riskier- https://news.bitcoin.com/kyc-requirements-are-making-icos-riskier-not-safer/

Recent ICO Scams- https://tokentops.com/ico/scam/

How To Avoid ICO Scams - https://www.cryptocompare.com/coins/guides/how-to-avoid-scam-icos/

Follow me on Twitter @AltLedger