What Is KYC In Crypto?

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Have you ever asked yourself, “How safe are crypto exchanges”? Anyone registered on a cryptocurrency exchange has faced the necessity to pass KYC.

KYC (“know your customer”) suggests that financial institutions, including cryptocurrency exchanges, must have an idea of ​​who they work with to ensure a sufficient level of security and monitor attempts at fraudulent activity.

Since the digital asset market is growing, there is more and more interest in this area, including on the part of scammers. So, to protect respectable users and assets stored in the wallets of crypto exchanges, leading companies require passing the verification procedure. KYC is the main condition if you want to buy crypto with fiat currency. Also, without KYC, you cannot access advanced trading tools such as margin, futures, staking, etc. Spot markets are the only tool not requiring verification, although the withdrawal amount is limited, depending on the exchange. Each crypto platform sets its own rules for passing verification.

The most common requirements:

  • full name
  • phone number
  • residential address
  • date of birth
  • email.

Levels Of KYC

Client identification. Collection of the information about the user: email address, year of birth, phone number, passport, and place of residence. The procedure takes only a few days, given that no suspicious activity was noticed.

Customer due diligence. It happens that some details from the client’s past activities pop up in the process of verification, and it causes suspicion. In this case, the exchange needs to find out if the person was involved in fraudulent scams or if maybe one is still under investigation.

Constant monitoring of user actions on the exchange to identify suspicious activity and analyse transactions unusual for clients. These can be terrorism-related transactions in large amounts, etc. If such activity is noticed, the user’s account is blocked and the information is transferred to law enforcement agencies.

An example of the safest crypto exchange is WhiteBIT. It conducts quality user verification in a short time. If no suspicious activity was found in the user’s background, one passes KYC in a couple of days.