What is KYC#
"KYC" stands for "Know Your Customer" and refers to the process of verifying the identity of individuals or companies wishing to conduct business with another party. This process typically involves collecting and verifying personal information such as name, address, date of birth, ID card, and social security number.
For example, when you go to a bank to open an account, you need to fill out a lot of detailed personal information, which is KYC. Or when you open an Alipay or WeChat Pay account, you also need to undergo real-name authentication (provide real name, phone number, and ID card number), which is also KYC. KYC is essential for enterprise management, protecting the property security of both themselves and users, and meeting regulatory requirements of government departments.
What is KYC for Cryptocurrency#
Cryptocurrencies have decentralized characteristics and therefore have a certain degree of anonymity, which is somewhat contradictory to KYC. In recent years, there have been frequent incidents of fraud and theft in cryptocurrency transactions, and criminals have used cryptocurrencies for illegal activities such as fundraising, money laundering, and drug trafficking. Therefore, driven by governments and financial regulatory authorities around the world, KYC has gradually become a rule that cryptocurrency exchanges must follow.
To prevent money laundering, cryptocurrency exchanges have started using AML/KYC data insights. AML (Anti-Money Laundering) refers to a series of laws and regulations aimed at preventing money laundering activities. By using AML/KYC data insights, cryptocurrency exchanges can identify suspicious activities and prevent money laundering. This is a significant development as it will help increase the credibility of cryptocurrencies and increase adoption rates.