Cryptocurrency exchange platforms are essential points of access in the crypto sphere, offering a great range of tools to buy and sell crypto. These interactive platforms provide not only convenience when executing transactions but also additional trading features such as margin trading and contract arrangements. Such services are integral parts of the digital universe, allowing buyers and sellers to easily work with assets while providing liquidity throughout the market.
Exchange platforms have two main forms:
- Not regulated.
A regulated exchange is a trading platform that works with the strict guidelines of government oversight and its related agencies. These exchanges must adhere to certain regulations, including anti-money laundering (AML) policies as well as know-your-customer (KYC) protocols for verification.
What is KYC in Crypto?
KYC is a process that verifies the identity of customers on crypto exchanges, which has been legally mandated in many countries as part of an effort to restrict money laundering, terrorist financing, and other prohibited activities.
To validate the identity of a crypto exchange user, KYC must be fulfilled. This includes giving your data such as full name, address, birth date, and government-issued identification documents. So that this information may be confirmed for its accuracy, exchanges either compare it with official state records or by utilizing external verification services.
After verifying a user’s identity through KYC, access to additional features on the exchange may be granted, such as greater transaction limits or trading fiat currency. KYC is a tool for confirming the trustworthiness and reliability of cryptocurrency transactions to avoid fraudulence and other illegal endeavors within the exchange.
Pros of KYC for crypto exchanges and clients:
- KYC is essential in securing your business against fraud and money laundering by verifying the identity of customers and ensuring that they are not engaging in unlawful activities.
- KYC verification builds a sense of trust between the user and the exchange, enabling more transparency and assurance that everything is operating in compliance with regulations. This could potentially lead to improved customer confidence when engaging with the platform.
Cons of KYC verification:
- Many users can feel intimidated to give out their personal information on an exchange, particularly when they are worried about data security or the possibility of identity theft.
- Sometimes, KYC verification is a tedious process that requires users to provide extra documentation and wait for completion, which may be incredibly inconvenient.
- Individuals who cannot or choose not to pass KYC verification may be restricted in their access to certain features, like greater transaction limits and trading with fiat currency, on the exchange.
If you are a Diya user and a Ukraine resident, your KYC verification on the WhiteBIT exchange will take just a couple of hours. Try this large and secure platform for crypto trading and you will see all the benefits of working with a regulated cryptocurrency exchange.