Cryptocurrency exchange KuCoin has announced its plans to introduce mandatory know-your-customer (KYC) checks, effective July 15, 2023, as part of its ongoing efforts to enhance security and comply with global regulations. This strategic move aims to bolster the security level of user accounts and foster a safer trading environment for all cryptocurrency users.
Safeguarding user assets and addressing evolving security challenges
The decision to implement KYC checks comes amid increasing concerns about fraudulent activities, money laundering, and terrorist financing within the cryptocurrency industry. Regulators have been critical of crypto exchanges’ perceived lax KYC practices, prompting exchanges to take stricter measures to address these concerns.
Starting from July 15, 2023, all new customers registering on the KuCoin platform will be required to complete the KYC process to access the exchange’s comprehensive suite of products and services. The KYC process ensures high accountability and transparency, providing a secure trading environment for users.
Additionally, existing customers who registered before the implementation of the new KYC rules will also be required to complete the verification process. Failure to do so will result in restricted access to certain features on the platform. While these users will still be able to utilize services such as spot trading sell orders, futures trading deleveraging, and margin trading deleveraging, they will no longer be able to make deposits. However, withdrawals will remain unaffected.
Johnny Lyu, CEO of KuCoin, emphasized the exchange’s commitment to user asset security and compliance with regulatory requirements worldwide. He stated, “As a globalized exchange, KuCoin closely monitors the crypto policies of various countries and respects compliance requirements, providing users with enhanced asset security.” The strengthened KYC system is a proactive step to safeguard users’ assets and address the evolving security challenges associated with on-chain assets.
The upgraded KYC framework requires users to provide their name, identification number, and identification photo and undergo facial recognition. KuCoin ensures compliance with the laws and regulations of applicable jurisdictions by verifying customer identification data. Furthermore, the exchange collects additional information related to customers’ business and risk profiles, including the nature and volume of trading activity and the origin of virtual funds deposited.
The implementation of mandatory KYC checks by KuCoin will impact a significant number of cryptocurrency users worldwide. As of July 2022, the exchange boasted over 20 million registered accounts, making it one of the world’s largest crypto exchanges by user base. Additionally, KuCoin’s daily trading volumes amount to approximately $540 million, with more than 8 million monthly visits, according to CoinGecko.
KuCoin’s move to strengthen its KYC system aligns with a broader trend in the cryptocurrency industry. Several exchanges have been increasing their KYC policies recently to enhance security and combat illicit activities. In May, Bybit exchange restricted non-KYC users from withdrawing more than 20,000 Tether USDT monthly. The prevalence of cybercriminals selling hacked and verified crypto accounts on the darknet further emphasizes the need for stringent KYC practices to safeguard user assets.