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What the Dormouse Said: $3,000 for Your KYC?

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Written by   35
2 months ago

There’s a specter haunting the cryptocurrency space and it’s coming for you. I’m about to tell you something that will shock and lock your jaws.


Why I’ve Spent 17 Years Freelancing

I’m a firm believer that any of us are only as free as we claim to be. It isn’t words that establish freedom, but actions. No Constitution, no government, no political party, no other human being can give you freedom. You either assume it or you lose it.

That’s why, in January 2006, after spending a year in Iraq as a National Guard officer to help a former president build his legacy on the back of an unnecessary war, I put up a digital sign and set up shop as a freelance writer. Writing for hire has been my primary source of income for going on 17 years now. During that time, I’ve written more than 10,000 blog posts, countless white papers, loads of social media content, infographics, and much more. I’ve ghostwritten books for executives, edited online publications, and covered the news.

Not all my writing carries a byline. Sometimes, I get paid good money to let the client get all the credit, and I’m okay with that.

Since 2013, my focus has been on financial technology. In 2018, I narrowed that to blockchain and cryptocurrencies. In terms of income, I’ve had some awesome years and some not-so-great years. Overall, I’ve been satisfied with the work, the clients, and the money. I can count on one hand how many clients I’ve explicitly told to hit the road. My most recent was last month. If you want to know why, keep reading to learn why I gave up a $3,000-a-month gig where my average time writing was 28 hours.

Source: Unsplash

What Makes a Good Writing Client?

In 17 years, I’ve worked for hundreds of companies in several industries of various sizes. That includes Mom-and-Pop businesses as well as global consulting companies. I’ve earned as little as 10 cents per word and more than $1 per word. The highest paying clients have not always been the best, but they usually are (and not because of the money). I decided a long time ago not to take an assignment just for the dough.

When evaluating a potential client, I look for three things:

1.    Respect for my work. Beyond a fair wage, a client must show respect for my writing skills, research ability, and overall work and service ethic (which, I humbly claim are above the lion’s share of my peers). If I sense there is a lack of respect for what I bring to the table, a potential client isn’t worth my time.

2.    The project must excite me. Were I to commute to an office job five days a week, I’d want the office environment to be enjoyable. That involves more than management and company culture. It also includes the ability to get along with coworkers. Since I work alone in a remote location, almost 100 percent of work satisfaction is tied to what I’m writing about. Most client interaction is by email or other digital communication tools. Most client time, however, is spent researching, interviewing subject matter experts, and writing. Therefore, working on a project that excites me is paramount. If I wouldn’t write about it without pay, I shouldn’t write about it for pay, regardless of the compensation.

3.    The prospect must understand the value of my service. Every commercial transaction involves a trade of value for value. If one party gives insurmountable more value than the other, it’s an unequal relationship. There have been times when I’ve taken less compensation for a job because I wanted to work with a certain client, on a certain project, or needed to fill a gap between between income and expenses. In general, I expect to be paid what I’m worth, so I make sure to sell the value of my service to the client. My best clients understand the value of my time, my skill as a writer, and my knowledge of the subject matter.

During the qualification process, I can detect when a client has no clue how to work with freelancers and doesn’t respect the work, hasn’t bothered to learn what kind of projects I like to take on, and doesn’t understand the value of a good writer. I must then decide whether I want to take that client on or not. I’ve learned how and when to say “No.”

Why I Ended a Relationship That Was Going Well

Earlier this year, an online publication approached me to write articles about events in the crypto space. The economics of the news business make the pay less than similar work in the corporate world, but I like writing about crypto. All indicators showed that they understood the value of my work and respected it, even the pay they offered.

Things went well for six months. During that time, both the editor who hired me and the chief operating officer moved on. That happens. It’s nothing to cry about.

One day, the company announced in its Discord server that they were going to subject everyone to a KYC verification process. KYC is an acronym that stands for Know Your Customer. It’s common practice in the financial sector so that banks, investment firms, and other institutions can verify customer identities for regulatory compliance. Why would a media company KYC contractors working in a non-financial capacity? I had to ask.

The response: “The IRS is cracking down on companies in the crypto space.”

Yes, I countered, but they’re interested in catching people evading capital gains. That doesn’t apply to writers and work-for-hire contractors.

Response: “It’s a common practice to verify employee identities.”

Whoa! I wasn’t an employee. My contract, written by the company, stated so explicitly. They weren’t providing health insurance. Nor were they offering paid vacation days or other employee benefits. Our agreement spelled this out explicitly.

In 17 years, I’ve never had a client ask me to undergo the KYC process—and I write about financial matters all the time. I’ve never been asked for my driver’s license or other government identification because I have an IRS-issued EIN for my business, organized as a limited liability company. My W-9 reflects this. I kindly declined to submit to the company’s KYC process—based solely on fear of the IRS—and I didn’t write any more articles for them. That’s when things got weird.

Why I Agreed to Submit to KYC Anyway

The next day, the CEO of the company contacted me to inform me that I would have to complete the KYC process before they’d send my final payment. That’s illegal.

When I answered his email explaining that we had a legal agreement, I fulfilled my obligations to the company, and they were legally obligated to pay me for the articles they had published, he didn’t respond. For two days, all I heard was crickets as this company held my money hostage.

Ten years ago, I’d have used my search engine optimization skills to wage a negative reputation management campaign against the company until I got my money. I’ve employed that tactic in the past and it worked wonders. In 2022, it takes much longer to move the Google needle, and recent algorithmic updates informed me the process might not work as well as it used to. I nixed the idea.

Another undesirable option was the legal path. It would have cost me more than $3,000 to pursue a legal course of action and it would be months before I’d see a return. Instead, I took a deep breath, swallowed my pride, and clicked the ID verification link in my inbox. I got paid the next day.

That specter I talked about earlier, it’s very real. The regulators are coming and everyone knows it. The Terra Luna incident—and now the FTX debacle—have crypto industry insiders walking on eggshells. People are so afraid right now, they’re seeing ghosts while the lights are on. And that’s why a media company is KYCing non-financial contract workers.

Could a similar incident happen to you? You bet it could. Feed your head!

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Cryptocracy is a decentralized newsletter published several times a week. I curate the latest news and crypto analysis from some of the brightest minds in crypto, and sometimes offer a little insightful and snarky commentary. Always fresh, always interesting, and always crypto. Original articles on Fridays.

First published at Cryptocracy. Not to be construed as financial advice. Do your own research.

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