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- According to a recent study by CipherTrace, more than 50% of all worldwide cryptocurrency exchanges have weak know your customer (KYC) identification particles.
- This includes exchanges in Europe, the United Kingdom, and of course, the United States.
According to a recent study by the blockchain analysis company CipherTrace, more than 50% of all worldwide cryptocurrency exchanges have weak know your customer (KYC) identification particles. This includes exchanges in Europe, the United Kingdom, and of course, the United States.
More than 800 decentralised, centralised and automated market maker platforms were analysed in the research up from the company and found that 56% of them did not follow the guidelines for KYC. This came despite the anti-money-laundering regulations in numerous countries all around the world.
In particular, Russia, the US, and the UK with three of the biggest countries with the highest numbers of exchanges that had we know your customer protocols. The study goes on to say that it found many platforms didn’t even bother to mention the country of origin on the website, never mind the terms of conditions. Interestingly though, this appears to be done on purpose as it is a big indicator that many exchanges are on the down-low in their jurisdictions to avoid having to register with any anti-money-laundering regulation in their native country.
The CEO of the blockchain analysis company, Dave Jevans went on to discuss the booming DeFi sector but mentioned that these kinds of protocols wouldn’t accept the regulations very easily.
He goes on to say that in his experience over the past few months, they don’t want anything to do with KYC as he further went on to say:
“They just say they are writing software and, while they get beneficial funds from it, they are not ‘operating’ it. But it’s interesting to see what the governance of the platforms is, which often happens to be from venture capital-backed companies.”
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