- KuCoin has announced a mandatory Know-Your-Customer process effective from July 15, 2023.
- The KYC move is seen as a step towards strengthening the exchange’s global anti-money laundering compliance.
- All users both new and old will have to go through the KYC process or else their accounts will be limited.
Cryptocurrency exchange KuCoin is set to start mandatory know-your-customer (KYC) checks from next month. This was announced by the exchange on Wednesday. This will also apply to existing customers who will not be allowed to trade or make deposits without verifying their identities.
The new KYC registration goes into effect on July 15 in a move aimed at strengthening its compliance with global Anti-Money Laundering regulations.
Existing users are not spared either, those who registered before July 15, 2023, will also have to complete the KYC process to access some features from KuCoin; they will be able to withdraw but not make any new deposit until they complete the KYC process.
According to a press release, non-KYC users will only be able to use “spot trading sell orders, futures trading deleveraging, margin trading deleveraging, KuCoin Earn redemption, and ETF redemption”.
According to KuCoin CEO Johhy Lyu, as the cryptocurrency industry develops, becomes mainstream, and gradually moves from a geek-only product to mass adoption, security challenges emerge.
According to data from CoinGecko, KuCoin is one of the largest crypto exchanges in the world with 24-hour trading volumes of $531 million, 27 million users and 8 million monthly visits as of June 30, 2023. This is huge, in comparison with other exchanges like Kraken which has about 4.78 million visits per month and 380 million worth of crypto traded daily. However, it is still smaller compared with Binance at $4.5 billion and 61.5 million visits per month.
According to the Seychelles-based exchange, it is built with the mission to facilitate the global free flow of digital value, it claims that its platform has an intuitive design, a simple registration process and a high level of security. The platform supports futures trading, a built-in P2P exchange, the ability to purchase cryptocurrencies with a credit or debit card, and instant exchange services
The era of security upgrades in the crypto space
KuCoin is not the first or the only exchange that has taken security measures. In 2021, Binance made a similar move when it announced that new users had to go through an intermediate verification process to access its products and services. The users had to verify their country of residence, and nationality and provide a government-issued ID.
In May, Bybit exchange restricted non-KYC users from withdrawing more than 20,000 Tether monthly. The downside of this push for security push is that Cybercriminals on the other side are capitalizing on the KYC requirements by selling hacked and verified crypto accounts on the darknet for as little as $30.
Legal Challenges
KuCoin has had its own share of legal woes beginning with a legal suit from Canada’s Ontario Securities Commission which banned KuCoin from operating in the Ontario province and fined the company 2.1 Million Canadian dollars. In March this year, New York Attorney General Letitia James sued KuCoin for operating in New York without registering as a securities and commodities broker-dealer even though it was a Seychelles-based company.
The platform provides services to countries such as Turkey, India, Japan, Canada, the UK, Singapore and many others. It supports a large number of trading pairs and offers nearly 700 cryptocurrencies for buying, selling and trading including BTC, ETH, USDT, BNB, ADA, XRP, USDC, DOGE, DOT, UNI and more. The exchange is not licensed to operate in the US but traders and crypto investors have the option to register their accounts.
