DEX Lets Customers Make $100,000 Transfers with No Identity Check

Big money transfers? With no know-your-customer requirements?

In the TradFi world that would be impossible. In DeFi, it’s part of the anonymous ethos. Now a new deal is testing the expectations of both sides of finance.

No KYC

On June 27, THORWallet DEX, a self-managed wallet supporting cross-chain trades across multiple blockchains, started permitting customers to make $100,000 worth of annual transfers without requiring additional identity verification.

THORWallet DEX joined forces with Mt Pelerin, a Swiss fintech firm specializing in digital assets. The partnership allows users in 172 countries to transfer up to 100,000 Swiss francs ($CHF) to and from the platform per year without undergoing know-your-customer (KYC) verification.

But some commenters have highlighted that THORWallet’s partnership with Mt Pelerin is not aligned with DeFi’s ethos of permissionless and anonymous transactions.

Twitter user SovereignPleb questioned “how is a credit card payment non-KYC?”

Mt Pelerin replied that non-KYC does not equate to anonymous transactions. Bashar85251360 suggested a possible workaround, asking “does anyone know if it takes prepaid credit cards?”

Cross-Chain Swaps

The deal allows users to make transfers of up to 200 CHF at a time, with a limit of five transactions daily. Mt Pelerin is licensed to offer KYC-less money exchanges limited to 1,000 CHF daily, 15,000 CHF monthly, or 100,000 CHF annually. The Swiss Franc is currently worth approximately $1.05 U.S.

THORWallet is the native wallet of the THORChain ecosystem, which was an early front-running project targeting the niche cross-chain swaps. But despite garnering significant bullish sentiment early last year, cross-chain blockchain architecture has since been criticized for suffering frequent security exploits, with THORChain being no stranger to hacks.

White-Hat Hacker

In mid-July 2021, THORChain liquidity provider lost about $7.6M in assets three months after the protocol entered its guarded launch. One week later, a purported white-hat hacker made off with a further $8M, offering repayment in exchange for a 10% bounty and claiming they intentionally limited the scope of the damages to teach the team a lesson.

“Multiple critical issues… Disable until audits are complete… Do not rush code that controls 9 figures,” the attacker said.

THORChain also lost $140,000 worth of assets to an attack in June. The THORChain team appeared to foreshadow its future losses when responding to the incident with “first exploit attempt was limited to only 140k which is a small amount compared to other exploits.”