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?
For legit ones its certainly an obligation for them to carry out KYC due to anti money laundering, for those sketchy ones I think KYC is used as a tool to paint a picture of being legit but its all bullshit as engineer the rug pull & just harvest this KYC data and sell it to the highest bidder!
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.
Some exchanges use thirdparties which has its advantages and don't require you to enter these details several times, do it once on the platform and never again.
Some exchanges handle the whole process but the handling of data is what should intrest us.
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.
Very important questions indeed.
Am sure they need to have answers of all their clients should something happen and don't want to be caught napping especially that negligence comes at a cost.