Mining City just locked down its affiliate withdrawal system, demanding identity verification from anyone who wants their money out.

Starting October 16th, the crypto investment platform announced it would only allow withdrawals from users who complete KYC—know-your-customer identity checks. The company posted the news in its backoffice and dressed it up with corporate language about regulatory compliance and protecting the community.

"The reality is that sweeping changes are happening across the crypto industry, and the pressure from external regulators on crypto companies and communities is mounting," Mining City said in its statement. The company claimed it needs to adjust operations to meet regulator requirements.

The timing is suspicious. Mining City has been accused of running a securities fraud operation globally since mid-2019. Yet the company suddenly cares about following regulations now—right when it needs to stem a flood of withdrawal requests.

The KYC requirement plays straight into Mining City's hands. Most people who signed up for the platform used fake personal details. Many created multiple accounts stacking rewards. Now they can't withdraw without submitting real identification and documents, which many simply won't do.

Mining City says it's using Sumsub, a London-based verification service, to process identity checks. The company warns that sending out verification emails could take up to 15 business days. Processing the actual verification could take another 30 days or longer. That's a month and a half of frozen accounts before withdrawals might even begin.

The delay tactic comes as Mining City's underlying economics have collapsed. The platform initially paid out rewards in BTCV, a cryptocurrency that tanked in value. Mining City then pivoted to a new token called Electric Cash. After the initial price pump, ELCASH also crashed. With two failed tokens behind it, Mining City appears to be running out of new financial products to launch.

An update from October 23rd revealed Mining City didn't even go directly to Sumsub. Instead, the company routed KYC services through Mobilum, a Canadian fintech company that's publicly traded. Mobilum's Canadian corporate address is listed as a virtual office. The verification emails sent to Mining City affiliates contained links pointing to Mobilum's website, which then funneled users through to Sumsub for the actual identity checks.

This multilayered setup raises questions about what Mobilum actually knows about its client. It's unclear whether the fintech company understands it's providing identity verification services for what appears to be a Ponzi scheme disguised as a mining operation.

Mining City's playbook is old and familiar: block withdrawals under the guise of regulatory compliance, create processing delays measured in weeks, and watch as frustrated users give up trying to access their funds. For a platform that can't generate legitimate returns anymore, frozen accounts are the next best thing to actual money.

🤖 Quick Answer

What withdrawal restrictions did Mining City implement in October?
Mining City disabled its affiliate withdrawal system, requiring users to complete KYC (know-your-customer) identity verification before accessing funds. The platform justified the measure by citing regulatory compliance demands and industry pressure, though the timing raised concerns among community members regarding the platform's operational transparency.

What justification did Mining City provide for the KYC requirement?
Mining City attributed the KYC implementation to increasing regulatory pressure on cryptocurrency companies and evolving industry standards. The company stated that sweeping changes across the crypto sector necessitated operational adjustments to meet external regulator requirements and community protection measures.

When did Mining City's KYC requirement become effective?
Mining City announced the KYC requirement would take effect starting October 16th. The company communicated this policy change through its backoffice platform, utilizing corporate language to frame the decision as a necessary regulatory compliance measure affecting withdrawal processes.

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