Taking a pivotal step towards heightening its user identification measures, KuCoin, the prominent cryptocurrency exchange, is set to incorporate compulsory Know Your Customer (KYC) checks into its platform.
The upgrade to the KYC system was officially declared by KuCoin on June 28, emphasizing that these measures will come into effect starting July 15, 2023. The new mandate states that users who register after this date will have to comply with the KYC process to avail themselves of KuCoin’s array of services.
Existing users, those who registered prior to July 15, 2023, will also be asked to complete the KYC process to access specific features on the platform. Particularly, they will be barred from making new deposits, though the withdrawal process will not be changed.
However, KuCoin has made provisions for existing users who haven’t undergone KYC checks. They can continue to avail themselves of services such as spot trading sell orders, futures trading deleveraging, margin trading deleveraging, and also redeem their stakes at KuCoin’s lending hub, KuCoin Earn, and participate in exchange-traded funds’ redemption.
In a conversation with Cointelegraph, Johnny Lyu, KuCoin’s CEO, clarified that the exhaustive KYC procedure would require users to provide their name, identification number, a photo for identification, and undergo facial recognition. Lyu highlighted that KuCoin meticulously collects and verifies these customer identification details as per the legal mandates of the applicable jurisdictions.
Lyu also mentioned that, in addition to the identification details, KuCoin collects ancillary information related to the customer’s business activities and risk profile, which could include aspects like the kind and volume of trading activity, and the origin of the virtual funds deposited. This data collection is in compliance with the requirements of the jurisdictions they operate in.
Emphasizing the significance of KYC in their operations, Lyu explained that KuCoin has consistently followed KYC protocols. Their adherence to these protocols is dictated by the regulations of the jurisdictions they operate in, in the absence of a global standard for KYC.
However, a KuCoin representative clarified that the updated KYC policies are not applicable to users in the United States.
This enhancement to the KYC protocol is expected to impact a large demographic of cryptocurrency users across the world, considering KuCoin had over 20 million registered accounts as of July 2022. Also, KuCoin is recognized as one of the world’s most voluminous crypto exchanges, with daily trading volumes reaching about $540 million and over 8 million monthly visits, as reported by CoinGecko.
Along the same lines, several cryptocurrency exchanges have been reinforcing their KYC policies. As an example, as of May, the Bybit exchange restricted withdrawals for non-KYC users to no more than 20,000 Tether USDT per month. Meanwhile, malefactors are attempting to exploit these KYC requirements, reportedly peddling hacked and verified crypto accounts on the darknet for $30 as of April 2023.