Exchanges Must Now Implement KYC Like Traditional Banks

Coinbase, one of the worlds’ most popular crypto exchanges in the world, is set to go public on the 16th of this month. The crypto exchange has participated in several funding series, and it has now reportedly met the $100 billion valuation it needs to go public. However, this news is just the tip of the iceberg of the recent successes of many crypto exchanges in the last few years.

These Blockchain firms have carried the market, providing bespoke services to the many investors flocking the space. However, many analysts have continued to call on these crypto exchanges to implement proper Know Your Customer (KYC) as a formal requirement to improve the business’s effectiveness in the Blockchain space.

Crypto exchanges have a lot to do

The lack of Anti-money Laundering and KYC policies was first sighted in the cryptocurrency’s market bull run of 2017. However, despite that period’s observations, many of these crypto exchanges have refused to implement strict KYC rules since that period. The lack of proper KYC in place has also been sighted by many top industry players, who believe that the crypto exchanges have many lapses to cover in that regard.

A new report which surfaced late last year showed that more than 450 crypto exchanges out of the 800 sampled did not follow incorporate proper AML and KYC policies in their operations. However, the beginning of the year had witnessed many more crypto exchanges adjusting their KYC rules, as demand from both stakeholders and customers has been on a high. Many of the customers of these exchanges believe that if the crypto exchange puts proper KYC policies in place, it will reduce identity fraud which has continued to be prevalent in the crypto space.

Unfortunately, many of these customers do not help the crypto exchange to implement these policies. A few crypto exchanges have sighted the lack of customer identity details due to poor KYC and AML policy implementation. They believe that many customers want to remain anonymous, so they do not want to provide accurate details, unlike traditional banks’ compliance.

Customers must take compliance seriously

However, popular crypto exchanges like Binance, Geminin, and Coinbase have started to implement proper KYC policy, as the crypto market boom has seen them witness high customer influx. These exchanges have now resorted to allowing only customers who can confirm their identity, open accounts with them. This new update of policy by the exchanges is because they have been the most affected by identity hacks in the crypto space.

However, they have since been able to curb the growing menace by imploring their customers to do more in terms of compliance and protecting their assets adequately. However, while the issues of KYC compliance continue to arise between Crypto exchanges and their customers, the customers should do more, as they are the biggest beneficiary or losers in the process of these policies being implemented or not.

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