What is KYC (Know Your Customer)?
In one line: KYC, short for Know Your Customer, is the identity check that banks, brokers and crypto exchanges run before letting you open an account or move money.
The idea in plain words
Before a broker or exchange lets you trade, it has to check that you're a real person and who you say you are. That's KYC, Know Your Customer.
In the US, this comes from anti-money-laundering laws such as the Bank Secrecy Act. Banks, brokers and US crypto exchanges must follow them. Most regulated platforms around the world have similar rules.
What they usually ask for
- Full name, date of birth and home address
- A government ID, like a driver's license or passport
- A Social Security number in the US (brokers need it for tax forms)
- Sometimes a selfie or short video, to match your face to the ID
- For larger amounts, sometimes proof of where your money came from
A simple example
You sign up at a US crypto exchange. You can browse prices, but you can't deposit until you upload your license and take a selfie. A few minutes or days later, the account is approved and you can fund it.
It feels slow. But it's also part of why regulated platforms can freeze stolen funds and work with police.
Why it matters
KYC is a sign of a regulated business. A platform that offers high leverage and "no ID needed" may be offshore and outside US protections. If it fails or freezes your money, you may have little help.
The trade-off is privacy. Your ID data is stored by the company, so pick platforms you trust.
A common mistake
Sending ID to anyone who asks. Scammers set up fake "verification" pages and fake support chats to collect passports and selfies, then use them for identity theft.
Only do KYC inside the official app or website you opened yourself. Never send ID photos by email, chat or DM to "support."
More in how to buy crypto safely.
Questions
Why do exchanges need KYC?
Laws against money laundering and fraud require it. In the US that includes the Bank Secrecy Act.
Is it safe to do KYC on a crypto exchange?
On a regulated, well-known platform it's standard. The bigger risk is fake KYC pages, so only verify through the official site or app.
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