KYC
Mandatory identification process to access financial services.
Beginner-friendly explanation
KYC ("Know Your Customer") is a legally required procedure: platforms must verify your identity before allowing you to trade or invest. For example, you must submit a copy of your ID and a proof of address before opening an account on a crypto exchange.
Intermediate-level insight
KYC involves collecting and verifying personal information (name, address, ID) to combat money laundering and fraud. KYC levels vary: some platforms require full verification, others allow limited functionality without full KYC. Example: Binance requires full KYC to withdraw more than 2 BTC per day.
Advanced perspective
At an advanced level, KYC integrates into compliance frameworks (AML, CFT). Some platforms deploy automated identity scoring, behavioral analysis, and biometric verification systems to streamline processes while adhering to international regulations (FATF, 5AMLD). Example: Kraken uses facial recognition tools to instantly validate some KYC applications depending on jurisdiction.
Security
KYC, identity verification, compliance, anti-money laundering, 5AMLD, FATF, proof of address, digital identity