KuCoin’s Know Your Customer checks will necessitate new users to complete identity verification in order to take advantage of all services while existing non-KYC users will be unable to deposit.
KuCoin, a significant cryptocurrency exchange, is aiming to improve its Know Your Customer (KYC) system by implementing additional mandatory identity checks.
KuCoin announced the impending KYC system upgrade on June 28 in an effort to better comply with international anti-money laundering laws.
The KYC authentication upgrade mandates KYC checks for all new KuCoin users from July 15, 2023. Newly registered customers won’t be able to use KuCoin’s broad selection of products and services without undergoing KYC, the company claimed.
Existing users who signed up before July 15, 2023, will also need to complete the KYC procedure in order to enjoy applicable KuCoin features. Such users will be unable to deposit new funds, but withdrawals will be unaffected, according to the notice.
Existing KuCoin customers will still be able to use services including spot trading sell orders, futures trading deleveraging, and margin trading deleveraging. Existing non-KYC users can also redeem their coins through KuCoin Earn, the staking and lending gateway for the cryptocurrency, as well as redeem their exchange-traded fund holdings.
According to Johnny Lyu, CEO of KuCoin, “a complete KYC process requires users to provide their name, identification number, and identification photo, as well as undergo facial recognition.” The CEO stated that KuCoin tracks and verifies the customer identification and validation information needed to comply with the relevant regulations and laws. He stated:
“We usually require customer identification information, including the customer’s name and other identifiers like a physical address, date of birth, and national ID number.”
KuCoin further collects additional data on the customer’s business and risk profile in accordance with the demands of the applicable laws and regulations. Lyu added, “Risk profile data includes nature and volume of trading activity, as well as the source of virtual funds deposited.”
The CEO continued by stating that KYC is a principle that “KuCoin has always adhered to,” and that identity recognition is an ongoing process. Lyu further emphasized that KuCoin designed its KYC strategy to meet rules in appropriate jurisdictions because there is no single worldwide KYC standard.
A representative for KuCoin stated, “KuCoin doesn’t support the United States KYC based on our current KYC or the updated KYC rules.”
The new KYC update will have a large impact on cryptocurrency users all across the world. According to the KuCoin, there were over 20 million registered accounts on the network as of July 2022.
According to trade volume, KuCoin is one of the biggest cryptocurrency exchanges in the world. Data from CoinGecko shows that at the time of writing, KuCoin had daily trade volumes of about $540 million and more than 8 million monthly visitors. For comparison, the well-known US exchange Kraken receives roughly 5 million visitors per month and does daily cryptocurrency trades worth about $380 million.
Other cryptocurrency exchanges have lately tightened their KYC regulations as well. Non-KYC customers were prohibited from withdrawing more than 20,000 Tether per month in May by the Bybit exchange. Cybercriminals reportedly sold hacked and validated crypto accounts on the darknet for $30 as of April 2023 in order to take advantage of KYC regulations.