She added that Hodl Hodl had introduced it without warning and explained it poorly, adding that if the feature returns in any form, it will be disclosed beforehand and "won't cost you the flexibility you came to Hodl Hodl for."
Hodl Hodl, a peer-to-peer Bitcoin exchange known for trading without identity checks, says a new system that screens incoming BTC for risk is "NOT a KYC/AML process" after users raised questions about trades being stopped for review.
- The company said in a Thursday post on X that it had rolled out "enhanced bitcoin security scoring" across the platform.
- Incoming BTC is now checked for what Hodl Hodl called serious red flags before a contract settles, and trades involving coins with a sufficiently bad score can be blocked.
"Most trades are unaffected," Hodl Hodl said, adding that the system is intended to stop rare cases where users could receive bitcoin that is difficult to move or cash out later.
But the distinction has drawn scrutiny because Hodl Hodl has long marketed itself around avoiding traditional compliance checks.
Its current FAQ still describes the service as offering "global P2P trades without KYC/AML" and says the company is not subject to complex compliance procedures because it doesn't custody customer funds.
The wording is less clear in its legal policy
Hodl Hodl's privacy policy, effective since June, already says the platform performs sanctions screening and fraud prevention required by AML/CFT regulations.
It also says Hodl Hodl uses account and transaction data to detect money laundering and retains data for five years to meet AML obligations.
That makes the company's new wording narrower than its broader legal disclosures. Hodl Hodl appears to be drawing a line between identity-based KYC/AML procedures and transaction-level bitcoin risk scoring, although its public statement doesn't explain where that line is drawn.
The backlash began after a user posted on X screenshots showing a contract marked "AML review in progress" and said another contract had been canceled following an AML check.
Hodl Hodl historically went further than simply saying KYC was optional. In 2019, it said it didn't plan to add KYC/AML procedures at all.