What is the KYC procedure and why is it needed?
Everyone who had experience with the cryptocurrency exchanges heard about the KYC procedure. Over the past few years, this has become an integral part of today’s platform security requirements. But why do you need to pass it and what good is that?
Know Your Customer (KYC) is the process of identifying customers and verifying their details. Most financial institutions, banks and cryptocurrency exchanges use it.
Different financial institutions require different sets of documents for verification procedure. In some cases, you may be asked for a bank statement or any other proof of your financial status. But for most cryptocurrency exchanges, a passport or driver’s license is enough to confirm your identity. Basically, the procedure lasts no more than 24 hours and takes place during the registration of the user on the platform.
Why is KYC required?
Some traders are not willing to share their personal data, wishing to remain anonymous. It is important to understand that KYC measures are mandatory for most crypto exchanges not only due to security requirements, but to provide access to an extended range of services.
For example, WhiteBit, one of the leading cryptocurrency exchanges, increases the cryptocurrency withdrawal limit (up to 100 BTC per day) and allows withdrawals of fiat money to all users who have passed KYC. Also verified users will be able to recover their account in case of loss of 2FA security code.
How to pass KYC?
All crypto exchanges have the same principles of verification procedure.
Let’s take WhiteBit as an example:
Let’s take WhiteBit as an example:
1. You need to register by following all the instructions and reading the license agreement.
2. Go to the account settings, select the “Verification” section and fill out the form.
3. Upload a photo of the document following the requirements and instructions (the picture cannot be cropped or edited).
4. Take a selfie with your document.
5. Wait for verification to complete. You're gonna get a confirmation email within 24 hours (often much faster) and your status will be changed in the “Verification” section. If you fail to pass verification, the Customer Support will provide the reason via email.
The KYC procedure is a mutually beneficial process between a trader and an exchange.
Clients get additional security and access to advanced features; exchanges get another anti-money laundering tool on the platform.The presence of KYC on a cryptocurrency exchange can be considered one of the main proofs of its reliability.
