For those of us who have been around since before the great crypto boom of 2017, having to undergo KYC (know your customer) procedures at digital asset exchanges was somewhat of an anomaly. “Back in the day” you were able to register to most crypto trading platforms using an email address and that was it. Those days are long gone.
Today, KYC is mandatory at effectively every reputable exchange and the number of no-KYC exchanges is dwindling fast. This begs the question: “Will no KYC exchanges survive in a regulated crypto market?”
The rise of KYC in crypto
While the majority of digital asset exchanges are not regulated in the same way as securities exchanges, most reputable crypto trading platforms have taken steps to prepare themselves for a future where the two worlds will merge.
A prime exchange for this would be New York-based , which was among the first trading platforms in the world to become a fully-regulated exchange. Gemini, founded by the , has always put regulatory compliance first and continues to do so today with recent hires of compliance offers and the launch of its own to insure user funds.
As 2017 took off and the ICO (initial coin offering) bubble was in full swing, financial regulators took notice and action in an attempt to protect consumers against losses in the cryptoasset markets. First and foremost, that meant that exchanges were scrutinized more closely.
Leading international exchanges that were once known for their easy and KYC-less signup process followed in Gemini’s footsteps and introduced identity verification measures. While in many cases small traders who only deposited and withdrew a few hundred dollars a month were left untouched, active traders and whales were asked to identify themselves via standard online KYC procedures that traditional online brokerages use.
Today, trading larger volumes on the exchanges which crypto market data provider CryptoCompare lists as the most trusted, including itBit, Gemini, , , , Liquid, , OKEx, , OKCoin, and others, requires identity verification.
Meanwhile, recently announced that it will not require traders to undergo any sort of KYC, provided they stay under a USD 10,000 daily withdrawal limit. This decision came shortly after the exchange changed hands from Circle to a group of Asian investors, including hypeman . Large traders, who deposit and withdraw higher amounts than that, however, will still have to undergo identity verification procedures.
A regulated market
If you have been following crypto for a while, you will know that regulation has been one of the biggest topics in the last couple of years. The has been discussing and (supposedly) working on developing a global crypto regulatory framework, while several nations have taken actions to either encourage or curtail crypto activities within its borders.
