In the 2017 beef market, most crypto services lacked proper Know Your Customer (KY) functionality and anti-money laundering measures. Even in 2020, 56% of 800 crypto exchanges and OTC offices followed poor KYC practices, according to a CipherTrace report. However, today’s rally in digital real estate has turned the cryptocurrency market upside down.

As a result, KYC and AML have become a top priority for cryptocurrency providers as many players in the industry rush to take action to get to know their customers better. “Know your customer” is increasingly required not only by service providers, but also by their customers.

This trend began in January 2021, when users became more involved and more willing to undergo procedures. Prior to the current beef market, only 20% of our customers who have started the registration process have been fully verified. This frequency has now changed to 33%, which is 65% higher than the willingness to pass Know Your Customer.

It is now clear that the attitude of both crypto companies and KYC users towards crypto has changed dramatically in recent months.

Binomial cryptocurrency exchange is only used now
While KYC compliance is the norm in the traditional economy, it is a somewhat controversial topic in the cryptocurrency community. On the other hand, many users refuse to disclose their details, claiming that it violates the basic principles of cryptocurrency and they don’t want companies and regulators to tell them what to do. On the other hand, KYC crypto services help protect users.

For example, when someone is unable to log into their account for any reason, the provider can easily regain access to the user if it is verified correctly. This would not have been possible on exchanges that did not collect customer data.

However, it took a while for cryptocurrency exchanges to take KYC (Know Your Customer) measures. Since the risk appetite varies from company to company, and because each vendor maintains a different level of trust and security on the platform, such measures are more important for some than others.

Whether a service provider decides to implement KYC procedures due to regulatory compliance or business preference, it is not uncommon for users to run into problems when trying to complete these procedures. For example, it may hurt a user to wait for more than a week (or even several days) until the customer support at the crypto exchange verifies the submitted documents.

However, with the right management, management and implementation, such problems can be avoided while increasing trust between the company and its customers. It conveys the message that the company takes its customers and safety seriously and is spending time and resources protecting them and their money.

The need for KYC
There are several factors explaining the growing interest in implementing appropriate KYC measures among cryptocurrency companies. One of the first reasons has to do with today’s bull market for digital assets.

In general, the rapid rise in cryptocurrency prices means a massive influx of new users to exchanges. Some market participants were unable to cope with this sudden influx and decided to introduce stricter KYC procedures to limit the number of customers on their platforms so that only those who want to sign up for an account want to verify their identity.

Apart from investors, traders and service providers, emerging markets are also a good opportunity for hackers and scammers who are increasingly targeting the crypto industry. For this reason, stock exchanges are turning to KYC and AML to keep customers safe and restrict fake transactions on their platforms.

At the same time, regulators have shifted their focus to digital assets, research, and legislation to drive a sustainable, fast-growing industry. As regulation continues in this sector, Know Your Customer has become one of the most important pillars of regulatory compliance in the financial industry. For this reason, it will be in the spotlight when regulators implement the framework for cryptography.

Cryptocurrency users don’t need to worry about KYC actions
In addition to companies, end users are also beginning to understand that appropriate KYC procedures mitigate risks, increase trust in the platform, and effectively protect them when using the service. With the growing interest in cryptocurrencies, stock exchanges are becoming more and more responsible, and the KYC app, along with other necessary controls such as fraud monitoring, helps them do just that.

Most importantly, the emergence of KYC procedures is not something that industry players should fear. This is a sign of market maturity and the gradual adoption of digital assets by traditional financial companies.

Source: CoinTelegraph