Major cryptocurrency exchange KuCoin is working to strengthen its Know Your Customer (KYC) system by introducing new mandatory identity checks.
On June 28, KuCoin officially announced that it will upgrade its KYC system to improve compliance with global anti-money laundering regulations.
The KYC certification upgrade will start mandatory KYC checks for all new users of KuCoin from July 15, 2023. Without completing KYC, newly registered users will not be able to access KuCoin’s suite of products and services, the company said.
Existing users who registered before July 15, 2023 must also complete the KYC process to access some of KuCoin’s features. Such users will not be able to deposit new funds, while withdrawals will not be affected, the announcement states.
Existing KuCoin users can still use services such as spot trading sell orders, futures trading deleveraging, and leveraged trading deleveraging. Other services available to existing non-KYC users include redemption from KuCoin Earn, the KuCoin staking and lending hub, and redemption from exchange-traded funds.
“The full KYC process requires users to provide their name, ID number and ID photo, and undergo facial recognition,” KuCoin CEO Johnny Lyu told Cointelegraph. The CEO pointed out that KuCoin brainstorms and verifies customer identity and verification data in accordance with the legal and regulatory requirements of applicable jurisdictions. He said:
“Usually, we require customer identification information, including customer name information and other identifiers such as physical address, date of birth and national identification number.”
As required by the laws and regulations of the applicable jurisdiction, KuCoin also collects additional information related to the customer’s business and risk profile. Lyu added that the risk profile data includes the nature and volume of trading activity, the source of deposited virtual funds.
The CEO went on to say that KYC is a “principle that KuCoin has always adhered to,” adding that identification is an existing process. Lyu also emphasized that since there is no unified KYC regulation globally, KuCoin’s KYC policy is to comply with the regulations of applicable jurisdictions.
“Based on our current KYC or updated KYC rules, KuCoin does not support US KYC,” a KuCoin spokesperson pointed out.
The new KYC update will affect a large number of cryptocurrency users around the world.KuCoin explain As of July 2022, there are more than 20 million registered accounts on its platform.
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KuCoin is also one of the largest cryptocurrency exchanges in the world by trading volume. As of this writing, KuCoin has a daily transaction volume of approximately $540 million and over 8 million visits per month, according to Data from CoinGecko. By comparison, Kraken, a major U.S. exchange, sees about 5 million monthly visits and trades about $380 million in cryptocurrency daily.
Some other cryptocurrency exchanges have also recently added KYC policies. In May, the Bybit exchange restricted non-KYC users from withdrawing more than 20,000 Tether (USDT) per month. As of April 2023, cybercriminals are reportedly using KYC requirements to sell hacked and verified encrypted accounts for $30 on the dark web.
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