Blockchain technology, which underpins the crypto business, is being hailed as a remarkable breakthrough that is providing transparency to monetary transactions. Because this is a new industry, they are keeping a careful eye on how it develops and functions.
Regulators have implemented a number of steps to reduce risks to the industry’s progressive expansion and to avoid unexpected bumps. KYC is one of these security measures.
What exactly is it?
KYC is an abbreviation for “Know Your Customer.” It refers to a financial institution’s responsibility to verify its clients’ identities and conduct background checks before enabling them to use its product or platform. It is part of a larger set of anti-money-laundering procedures.
Simply put, it prevents bad actors from concealing the source of their unlawful funds.
Is it feasible to trade without providing KYC?
Yes, not all exchanges need you to first complete the KYC procedure before you may trade. They are, however, becoming increasingly scarce. And there is nothing wrong with getting your KYC completed in order to trade freely. It may come in handy later on when filing complaints or resolving grievances.
KYC and cryptocurrency exchanges
Crypto trading, being a decentralised platform, eliminates the need for a person to do business through banks. As a result, the crypto business is vulnerable to KYC issues. Many decentralised services are intended to provide clients with anonymity.
As a result, many crypto companies are unable to identify their consumers, which authorities find unacceptable. As a result, crypto companies are now being requested to implement strict KYC checks.