CryptoCurrency LPT: Never accept crypto from another person directly into your CEFi or exchange wallet. Always use an intermediary wallet that you control, first. If not, you risk your funds being locked due to KYC.

I’ve seen an increasing number of posts lately on crypto subs about people who got their funds locked on an exchange or CEFi platform for whatever security reason. Then when they try to withdraw, they have to go through extra KYC hoops, such as proving the $ or crypto they used to fund their account was theirs.

It can become difficult or impossible to prove where/who funds came from, if you are not in control of the wallet it came from. What if your friend sent ETH directly to your exchange wallet? Now you have to ask them for a screen shot of the transaction from their wallet. What if they don’t have that wallet anymore? What if they’re not your friend anymore?

It’s easy enough to avoid this by having them transfer to an intermediary wallet you fully own and control. Then transfer from there to the exchange or CEFi platform.

It’s just risky all around to accept funds from a stranger directly to an account associated to your KYC. It’s not a crime, but you don’t know where those funds have been.

Summary: If you’re going to accept crypto from a stranger, it’s worth a few extra steps to keep it a wallet length away from your KYC so at least you don’t need to worry about whether you can produce needed wallet screen shots when required.