Technical Definition

KYC (Know Your Customer)

The identity verification process regulated platforms must complete before letting you trade or withdraw.

By Crypto University Editorial
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✦ Key Insight

It affects what you can do on a platform, and it means your holdings are linked to your legal identity for tax and law-enforcement purposes.

✕ Common Misconceptions

Leaving verification until you need to withdraw urgently. Also underestimating where the data goes — vendor breaches have leaked KYC records, so treat any message quoting your personal details with suspicion rather than trust.

Detailed Explanation

KYC usually means submitting a government ID, a selfie and proof of address. It is a legal requirement for platforms handling fiat in most jurisdictions, part of anti-money-laundering rules. Verification level typically determines your deposit and withdrawal limits.

In Practice

“A trader completes basic KYC to deposit, then finds a higher tier is needed before a large withdrawal can be processed.”

Dig Deeper

Wallet

Software or hardware that stores your private keys and lets you sign transactions.

Token

An asset created by a smart contract on an existing blockchain rather than being that blockchain's native currency.

Blockchain

A shared, append-only record of transactions maintained by many independent computers at once.

Transaction

A blockchain transaction is a signed or authorized instruction that changes blockchain state or transfers value when accepted by the network.