What is KYC?
Regulatory authorities around the world are working to create global standards — KYC rules — from the English "know your customer". These standards apply to the financial and technological sector and cryptocurrencies. The technology sector, which started with anonymous peer-to-peer payments, now takes into account the security of traditional finance, which means compliance with KYC rules. It is a control standard that helps to identify the identity of the client. Its essence is that users of the service must provide documents identifying their identity during registration or after it (usually a passport, driver's license, photo or selfie).
In the period from 2000 to 2010 in most jurisdictions: in the USA and Canada, in most European countries, South Africa, Russia, India, Singapore, South Korea, China and Japan (and these are just some of the states) — legislation regulating the rules of KYC and AML (laws on counteraction legalization of funds obtained by criminal means). As a result, banks and related financial institutions have become mandatory to comply with the requirements of anti-money laundering legislation.
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KYC compliance
In the crypto community, the KYC procedure was accepted with a degree of skepticism, since users were afraid to disclose their data, which could fall into the hands of fraudsters. Moreover, according to many crypto users, the KYC procedure contradicted the very idea of anonymity in the use of cryptocurrencies. However, with the growing popularity, the development of infrastructure and the adoption of the concept of cryptocurrency payments in many countries of the world, the mood among most users has changed.
A survey conducted among 624 respondents from Indonesia, the USA, Russia, India and Vietnam, as well as a number of other countries actively trading crypto assets on exchanges, indicates a change in opinions in the crypto industry among the community of active crypto users.
Is it necessary to pass KYC on the exchanges where you trade?
The majority of respondents noted that passing KYC on the exchanges where they trade most often is mandatory. At the same time, a quarter of respondents trade on platforms where the KYC procedure is not provided or is optional. Also, almost a quarter of respondents resort to this procedure only when withdrawing large amounts. The remaining part of respondents undergo KYC in cases where this procedure is required to withdraw funds from the deposit (6.9%), and only for transactions with fiat funds (5.0%).
The answers to one of the most key questions about the subjective attitude to KYC indicate that almost half of the respondents (41.9%) have a positive attitude to this procedure and consider it important for the legality and security of trading. A quarter of respondents (24.7%) have a positive attitude to passing KYC. The remaining users believe that it is worth resorting to the KYC procedure only in forced cases (20.7%) or avoid it altogether (12.7%).
About half of the respondents (47%) consider the role of KYC in the accelerated restoration of access to the account to be very important. About a fifth of respondents (20.2%) believe that this is a minor advantage. The remaining respondents believe that this option is valuable, but are ready to undergo KYC for other reasons — 19.9%, and 12.8% of respondents expressed the opinion that this advantage is insignificant for them.
KYC prevents individuals from sanctioned countries and market participants with a dubious reputation from entering the asset market, eliminating the risks for others to obtain potentially problematic assets. Is this KYC advantage valuable to you?
A survey conducted on the advantage of KYC in eliminating the risks of obtaining potentially problematic assets showed that 42.2% of respondents consider the exclusion of participants with a dubious reputation from the market to be an important advantage of KYC. 21.1% of respondents believe that this advantage is quite valuable, but they are ready to resort to KYC for other reasons. At the same time, 20.9% and 15.7% consider this advantage insignificant.
In case of loss of access to the exchange account or its blocking due to suspicious activity, the KYC passed allows you to speed up recovery. Is this advantage of KYC valuable to you?
Have you ever encountered a situation where the exchange, where KYC is not required, froze your funds and obliged you to undergo the procedure?
What is KYC?
