Hello everyone!
A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.
But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?
Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.
But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.
If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.
Most of these exchange especially the big ones gets third part providers that specialize securing identity verification and data handling.
This submission is really risky since we don't know on when those third party providers could able to make our identity secure.
Also look at what happen on Coinbase before
https://cointelegraph.com/explained/coinbase-data-breach-2025-what-was-stolen-and-what-you-need-to-know they experience this issue which expose lots people of some huge risk that they can't imagine.
But we don't have any choice since we need to comply on the requirements asked by the government. So what we need to do is to be prepared for possible situation like that will happen and be cautious on offers what we are receiving to avoid getting scam or compromised.