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 the upcoming KYC system upgrade in a move to increase compliance with global Anti-Money Laundering regulations.
The KYC authentication upgrade introduces mandatory KYC checks for all new users at KuCoin starting from July 15, 2023. Without completing KYC, newly registered users will not be able to access KuCoin’s suite of products and services, the firm said.
Existing users who registered before July 15, 2023, will also have to complete the KYC process to access some features on KuCoin. Such users will not be able to deposit new funds, while withdrawals will remain unaffected, the announcement notes.
KuCoin’s existing users will still be able to use services like spot trading sell orders, futures trading deleveraging and margin trading deleveraging. Other available services for existing non-KYC users include redemptions at KuCoin’s staking and lending hub, KuCoin Earn, as well as exchange-traded funds’ redemption.
“A complete KYC process requires users to provide their name, identification number, and identification photo, and undergo facial recognition,” KuCoin CEO Johnny Lyu told Cointelegraph. The CEO noted that KuCoin brains and verifies the customer identification and verification data required under the laws and regulations of applicable jurisdictions. He stated:
“Typically, we require customer identification information including information on the customer’s name and further identifiers such as a physical address, date of birth, and national ID number.”
Pursuant to the requirements of the laws and regulations of applicable jurisdictions, KuCoin also collects additional information related to the customer’s business and risk profile. Risk profile data includes nature and volume of trading activity, origin of virtual funds deposited, Lyu added.
The CEO went on to say that KYC is a principle that “KuCoin has always adhered to,” adding that identity recognition is an existing process. Lyu also stressed that KuCoin set their KYC policy to comply with regulations in applicable jurisdictions since there isn’t a unified global KYC regulation.
The new KYC update will affect a significant number of cryptocurrency users worldwide. KuCoin says it had over 20 million registered accounts on its platform as of July 2022.
KuCoin is also one of the world’s largest crypto exchanges by trading volumes. At the time of writing, KuCoin’s daily trading volumes amount to around $540 million, with more than 8 million monthly visits, according to data from CoinGecko. To compare, major United States-based exchange Kraken has about 5 million visits per month, with about $380 million worth of crypto traded daily.
Some other cryptocurrency exchanges have been increasing their KYC policies recently as well. In May, Bybit exchange restricted non-KYC users from withdrawing more than 20,000 Tether (USDT) monthly. Cybercriminals have capitalized on KYC requirements, reportedly selling hacked and verified crypto accounts on the darknet for $30 as of April 2023.