What is KYC?

KYC stands for “know your customer” and means the process of verifying a user’s identity. KYC is a requirement for many financial institutions and financial service businesses, including banks, stock brokers, and cryptocurrency exchanges.

The point of KYC is to confirm that a customer is who they claim to be and to prevent illegal activities, such as money laundering, funding terrorism, and tax evasion. If a crypto exchange doesn’t perform KYC, then it could be liable for those kinds of illegal activities.

You may be able to create an exchange account without going through the KYC process, but your account will have restrictions until you verify your identity. The most likely restriction is the exchange simply not letting you deposit money or buy crypto. Or it could put a limit on the amount of money you’re able to deposit.

Every crypto exchange handles customer identification a bit differently. Here’s the information you will typically need to provide during the KYC process:

• Full name
• Date of birth
• Social Security number
• Physical address

In addition, exchanges also generally ask for a photo of valid government-issued identification. This can be a driver’s license, state ID card, or a passport.

After you provide the requested information and a photo of your ID, the exchange will use that to verify your identity. This can take anywhere from minutes to several business days depending on the exchange and how busy it is. Often a crypto exchange requires additional verification. In that case, you may need to provide proof of your physical address or a selfie.