A Brief Overview of the KYC Check Process

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The KYC check process is a regulatory measure designed by Crypto exchanges to confirm the end users’ personal information, including name, address, contact number, email address, driver’s license, passport, social security number, etc. The purpose of this check is to determine their money laundering and fraud risk by running their information on an official AML or criminal database.

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3 Reasons to Not Buy Crypto Without KYC Check

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1.    Compliance

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In 2019, the SEC, FinCEN, and CFTC made AML compliance mandatory for Crypto exchanges, terming these platforms as money service businesses (MSBs). As a result, they are now required to follow Know Your Customer (KYC) rules set by the Bank Secrecy Act of 1970. Therefore, KYC is now a standard in the Crypto industry users and platforms are recommended to abide by it for maximum protection.

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2.    Popular Practice

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While the core purpose of Cryptocurrency exchanges and transactions was to ensure anonymity through decentralization, the industry’s growth and mass adoption has led to an exponential rise in fraudulent activities worldwide, including terrorism financing and money laundering.

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As a result, legislators have been forced to fill the regulation void by adapting KYC and implementing it as a first-stage verification process. Today, some of the most popular exchanges in the market are enforcing KYC policies to ensure compliance with global recognitions, including Coinbase and Binance.

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3.    Withdrawal Limitations

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Unsurprisingly, there are many exchanges in the market that aren’t enforcing KYC policies. However, they are encouraging users to opt for it by limiting the withdrawal amount or imposing other restrictions.

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For instance, Kraken, one of the world’s leading Bitcoin trading platforms, allows users to withdraw up to $5,000 per hour without KYC. However, if you’ve verified your identity through KYC, you can withdraw up to $1 million per hour.

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Similarly, Binance, one of the leading platforms for multi-crypto investments and transactions, allows you to trade without KYC. However, unverified users can only withdraw 0.06 BTC (or equivalent amount in another digital currency) within 24 hours. However, authenticated users can withdraw up to 100 BTC in 24 hours.

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Conclusion

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So, there you have it – 3 reasons you shouldn’t buy Crypto without a KYC check. The DeFi industry is rapidly evolving into the new normal, with governments and international bodies stepping in to accelerate global adoption. Know Your Customer is an international standard in the finance industry and a powerful tool to reduce money laundering and other malicious activities.

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Moreover, the process is transparent and harmless. Hence, there is no reason why any legitimate user should hesitate to comply with KYC requirements.

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StaySAFU is one of the leading Crypto KYC enablers in the industry, enabling businesses of all sizes and niches to quickly equip their blockchain or DeFi project with a clean and secure KYC. So, get in touch with our team to learn about our process and other services/solutions. 

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