Many users on social media are criticizing dYdX exchange’s face scanning application in the authentication process for receiving a $25 deposit bonus.
dYdX announced in a blog post on Wednesday that new users who deposit 500 USD Coins (USDC) for their first trade will receive a 25 USDC bonus promotion, provided they volunteer to do a “life check”. announced.
Although the app is completely voluntary, many on Twitter stated that this is not in line with privacy rules. DeFi Watch founder Chris Blec accused the dYdX exchange of “bribing users into allowing their faces to be scanned and showing it as a promotion”.
Blec said, “What dYdX is doing right now is completely wrong. They mislead users about their purpose. They know that every face data they collect is an innocent because criminals don’t scan faces, but dYdX can still use it. They bribe new signups just to satisfy regulators. ” said.
In the past I have lauded @dYdX for being honest about its centralized parts.
But unfortunately, that changes today.
They are bribing users to allow their faces to be scanned & disguising it as a “promotion”.
I’ve long predicted this would happen in DeFi, and now it’s begun. https://t.co/G0rJThHYhS
— Chris Blec (@ChrisBlec) September 1, 2022
dYdX, on the other hand, explained that they have reviewed many solutions and that face scans are the best user experience app for users to show whether they are truly a single person without revealing their full identity. A dYdX spokesperson told Cointelegraph that the $25 promotion does not require users to provide personal information and that image verification is for fraud prevention purposes only. Marc Boiron, Polygon’s chief legal officer and former dYdX’s chief legal officer, said on Twitter. in the statement claimed that viability checks were not combined with other requirements and were ineffective.
However, Blec said the dYdX exchange may have acted in favor of regulators. allegation by saying:
“It is absurd to assume that a crypto exchange that pays people to scan their faces serves any purpose other than to test a mechanism they plan to expand in the future for some reason.”
Adam Cochran, general partner of Cinneamhain Ventures, said: “Whatever the reason, this is an absolutely terrible idea and you should take it back immediately. There is absolutely no acceptable reason to collect user biometrics. You’d better drop the incentive program entirely.” said.
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A dYdX spokesperson said on Twitter: in the statement He said that verification has nothing to do with regulations and is just a tool to determine if it’s you. However, despite all this, dYdX did not make any statement about how to store the face scan data.