Yuga Labs faces user backlash for under wraps KYC-restricted project

Regulation

Yuga Labs, the creator of the Bored Ape Yacht Club, or BAYC, teased a new collaboration with blockchain game publisher Animoca Brands on Twitter on Thursday. The catch is that no details about the project have been revealed yet, and users who signed up for it via a Know Your Customer, or KYC, verification process have expressed their concerns on social media.

BAYC simply tweeted out a link to a website where interested fans can apply in the hope of being approved to participate in whatever “is brewing.” To apply, users must connect to an Ethereum wallet, provide a photo of their license, passport or other ID as well as proof of their home address, and take a headshot on the camera of the device on which they sign up.

Both BAYC and Animoca Brands clarified on Twitter that they are not referring to the play-to-earn game featuring Bored Ape NFTs they had announced in December. The only other information offered is that “this has been building over the last seven months,” according to BAYC. Animoca Brands will reportedly reveal “the first phase.” 

Members of the crypto community are wary about consenting to KYC requirements without knowing exactly what they’re signing up for. One user posting under the handle @cr0ssETH tweeted, “Devs, if the IRS has taken you hostage, please blink twice,” suggesting the possibility that any personal information could end up in the hands of third parties.

In addition to sensitivity around KYC, a Terms & Conditions document has been criticized for making users consent to an “unrestricted” use to “all or any portion of your User Content.”

Another user under the handle @maz_nf warned that crypto will soon turn into a “government regulated corporateverse,” recognizing the inevitability of an NFT community to adhere to regulation and legalities to truly go mainstream. 

Related: Harmony launches Bored Ape Yacht Club NFT Passport

These views sparked the debate about whether NFTs should be regulated and if KYC should be integrated into NFT marketplaces. Recently, OpenSea has been subject to phishing attacks and hacks that have left NFT owners very vulnerable. In December 2021, an art gallery owner’s Bored Apes collection, worth $2.2 million dollars, was stolen from his hot wallet. 

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