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Cryptocurrency platform KuCoin has announced that it will be introducing mandatory Know Your Customer (KYC) rules as it looks to embrace regulations.
The KYC rules will kick in as early as next month, with customers required to complete several mandatory identification checks to use services offered by KuCoin.
KuCoin Embraces Regulations
According to a press release issued by the KuCoin exchange, the KYC rules will kick in from the 15th of July. This means users will be required to complete KuCoin’s KYC process to use the exchange and its services.
“Consistent with KuCoin’s core values, we are dedicated to fulfilling ‘Know Your Customer’ obligation in accordance with the applicable regulatory requirements. We continually protect our customer’s assets and combat money laundering, terrorist financing, and related financial crimes around the world. Based on this, KuCoin will enhance the Customer Identification and Verification Program. The enhancement will officially take effect on the 15th of July, 2023 (UTC).”
Customers that do not complete the KYC process will be unable to trade or make deposits on the exchange, the press release stated. As a result, the introduction of these rules means current users will be forced to comply with KYC regulations to be able to access KuCoin’s full suite of products and offerings. The press release noted,
“Please take note of the following: Starting from the 15th of July, 2023 (UTC), newly registered users must complete their KYC in order to use KuCoin’s products and services. For users who registered before the 15th of July, 2023 (UTC), if their KYC is not completed, they will only be able to use services such as Spot trading sell orders, Futures trading deleveraging, Margin trading deleveraging, KuCoin Earn redemption, ETF redemption, and will not be able to use the deposit service (withdrawals are not impacted).”
Better Compliance With Federal Regulations
Cryptocurrency exchanges have come under considerable criticism thanks to a perception of being lax when it comes to Know Your Customer checks. Regulators have stated that such lax rules lead to fraud, terror financing, and money laundering. Jonny Lyu, the Chief Executive Officer at KuCoin, stated that introducing mandatory KYC checks would help the exchange better comply with federal regulations and enhance overall security. The CEO noted in the press release,
“As a people’s exchange, KuCoin has always prioritized the security of users’ assets. As a globalized exchange, KuCoin closely monitors the crypto policies of various countries and respects compliance requirements, providing users with enhanced asset security. With the development of the cryptocurrency industry, crypto has gradually moved from a geek towards mass adoption. However, this process has also brought about certain security issues concerning on-chain assets. In light of this, KuCoin has strengthened our KYC system to comply with regulatory requirements worldwide and better protect the asset security of all cryptocurrency users through enhanced KYC rules.”
KuCoin had stated in its annual review that it had over 27 million active customers on its platform at the end of 2022., with 13 million users joining the platform in 2022 alone. This represents a 102% growth year-on-year in the exchange’s user base. The exchange revealed that its most significant jump in numbers came from the Asia-Pacific region, where it added over 7 million new users in 2022, representing an increase of 191% since 2021. Other areas that saw an increase in user base were Latin America (120%), Middle East & Africa (120% and 109%), and Europe (100%).
Transaction volumes also saw a considerable increase between January and December 2022, with trading volumes across the spot and futures markets crossing $3.6 trillion, representing an increase of 52% year-on-year. At its peak, KuCoin’s daily trading volume in the futures markets reached a high of $23 billion, while the spot trading volume touched $12 billion.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.