KYC

What is KYC?

KYC (Know Your Customer) is a regulatory requirement where exchanges verify the identity of users before allowing them to trade. KYC requires providing: name, address, identification documents (passport, driver's license), and proof of address.

How does KYC work?

KYC processes work as:

1. User provides personal information and documents.
2. Exchange verifies documents (identity checks, address verification).
3. User identity is confirmed and registered.
4. User can now trade.
5. User data is stored by exchange. KYC verification can take minutes to days depending on document quality. Some exchanges use automated systems, others use manual review.

Why does KYC matter?

KYC prevents money laundering by ensuring regulators can identify who owns funds. This combats terrorism financing and crime.

Key features of KYC

• Regulatory requirement for exchanges
• Verifies user identity
• Requires government ID
• Stored by exchange
• Mandatory for regulated platforms
• Enables account freezing if needed

Examples of KYC

Coinbase requires KYC before trading. Kraken verifies identity with passport.

Uniswap requires no KYCanyone can trade. DEX platforms all skip KYC, creating privacy/risk tradeoff.