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Kucoin has implemented a mandatory KYC for all its users.
This step supposedly comes into action in order to make the fund and account security stronger.
Kucoin has been a popular crypto exchange. It has been in the crypto exchange business for a couple of years now.
All these years Kucoin has been quite liberal with its KYC policies.
Users were free to open their accounts and do their crypto exchange transactions without the need to undergo a mandatory KYC for their accounts.
Kucoin Mandatory KYC details
As per the announcement made by Kucoin on the 28th of June 2023
Kucoin is taking steps to increase the security of the platform and to enhance user experience for the customers. The Kucoin exchange is implementing stricter identity verification measures.
As per the CEO Johnny Lyu
https://twitter.com/lyu_johnny/status/1674005191321059328
- lyu_johnny
As of July 15th, new users would have to complete their KYC in order to use the kuoin exchange services.
Those users who are unable to complete the KYC or do not wish to do so would have limited access to
- Spot trading and sell order placement.
- Futures trading deleveraging,
- Margin trading deleveraging,
- "earn" product redemptions, and
- ETF redemptions
What happens to existing customers of the exchange?
The 15th of July is the date to be noted by the Kucoin users.
Those who have already registered with the exchange before the 15th of July must complete the account KYC so that they can use the complete functions of the Kucoin exchange.
Non KYC compliant users would not be able to deposit funds into the exchange.
What happens to the user funds which are already in their exchange accounts ?
The users would be able to withdraw funds from the exchange.
Kucoin claims that it has been an exchange that has always kept the user asset safety as the topmost priority.
Since Kucoin has operated as an exchange that operates on a global scale, the changes it is making to its policies are in accordance with the changing moods of the regulators who want stricter norms implemented and make KYC mandatory.
The CEO Johnny Lyu further states that crypto is moving from the geek only domain to a stage of mass adoption.
This would mean new security issues have come to the fore as part of the process.
What personal information do users have to share with Kucoin?
Users would be required to share information that includes
Their name
Identity photo
Undergo a facial verification
Providing this information would be a part of the mandatory KYC process.The KYC model that Kucoin is propagating is that as users provide to complete their individual profiles of their account the Kucoin platform would offer them a wider range of services and products to them.
With this process in place, a user would enjoy more features like an enhanced daily withdrawal limit
More extensive & feature rich trading tools plus
More variety in terms of user activity.
This is a big move for Kucoin and crypto
Kucoin was started as a basic barebone crypto exchange in the year 2017 and with time it has evolved and grown.
Its has grown to be a well trusted crypto exchange of choice for many.
Today it offers a bouquet of services to its 27 Million users in 207 countries.
As a full fledged crypto exchange, it provides a range of services to its users which include
- spot trading,
- margin trading,
- P2P fiat trading,
- futures trading,
- staking and
- lending
Kucoin offers these services and lets its users dabble in over 700 digital assets.
Kucoin has had a very successful run so far
Kucoin enjoys the trust of both its users as well as investors. Its business model and working have helped it raise $170 million in investments from rounds A and pre-Series B
This has given KuCoin a valuation of $10 billion and has made Kucoin getting ranked in the top 10 crypto exchanges.
Kucoin is both trusted and respected
Forbes has recognized Kucoin as one of the best crypto exchanges of 2023.
The Ascent has named it the Crypto App for enthusiasts.
Kucoin has been pro compliance
Even without the KYC mandate Kucoin has shown a tendency to comply with global laws and going with the spirit has restricted users from the United States, Canada, Singapore, China, and Hong Kong from using its services per its terms of use.
The Kucoin KYC implementation is being seen as a move that comes into play after the increased concerns of regulators and the case against Binance by the Commodity Futures Trading Commission of the United States of America.
One more Centralized exchange goes the KYC route
Doing KYC is one thing however the big question is what would the exchange do with the KYC data.
The KYC norms apply to the end users who register and use the services of the crypto exchange.
However, it is not always clear who gets to see the user information and the transaction details of the user.
Can KYC exchanges make a disclaimer about the use of the client data?
OK, now the crypto exchange has a user's data. This basically means the exchanges own all the user data with minimum of answerability in terms of the user data.
The exchange does not say what they do with the data. Is it for their exclusive use or would they share it with third parties for profit or on request?
If they are more transparent about the data usage the end users would be able to trust them more.
What is the liability of exchange in case of a data breach
As long as the exchange has limited data about a user the risk of user data getting hacked, sold, and exposed to the world via the internet is limited.
However, if KYC information is compromised then in such a case would the crypto exchange be willing to compensate the users?
If so, what valuation is being put on the cost of the user data?
What are the options for a KuCoin user who does not want to go the full KYC route ?
A user can go ahead and comply with the KYC requirements of the Kucoin exchange.
However there is the option of exploring the option of a DEX or a decentralized exchange to carry out the trade.