KYC (Know Your Customer)
KYC stands for Know Your Customer. It refers to processes financial businesses use to identify and verify customers. Crypto exchanges, brokers, custodians, and other regulated service providers may require KYC depending on their activities and jurisdiction.
✦ Key Insight
KYC is an important distinction between many centralised financial platforms and permissionless blockchain protocols. A centralised exchange might require a user to provide personal information before accessing services, while a decentralised smart contract may technically be accessible through a wallet without creating a conventional account. However, the website or company providing access to a decentralised protocol may still impose its own requirements.
✕ Common Misconceptions
Assuming every crypto platform requires KYC
Assuming no-KYC means anonymous
Uploading documents to fake websites
Confusing KYC with 2FA
Believing KYC eliminates platform risk
Ignoring regional restrictions
Detailed Explanation
How It Works
KYC may involve collecting:
Legal name
Date of birth
Address
Government identification
Photograph or identity verification
Tax information
Source-of-funds information in some cases
Platforms may also perform sanctions, fraud, or anti-money-laundering checks.
Requirements vary significantly by provider and jurisdiction.