What is Know your Customer (KYC)?
Know Your Customer, conveniently referred to as KYC, is a compliance process introduced by regulators for companies to check the identity and risk level of their clients. This KYC process typically requires an official identity check using a driver’s licence, passport or ID card.
Which cryptocurrency services usually ask for KYC documents?
- Centralized cryptocurrency exchanges (CEXs e.g. Binance or Kraken)
- Service providers
- P2P platforms
- Cryptocurrency casinos and sportsbooks
Advantages of KYC
- Protection against potential fraud, scams and illegal activities
- Helps to avoid multi-accounts and thus enables more exclusive offers for the verified users
Disadvantages of KYC
- Encouraging identity theft
- Encouraging identity fraud
- Helps scammers to stay undetected when stolen identity documents are used