Know Your Customer (KYC)
regulation · compliance · security
Compliance procedures that verify customer identity and risk before providing regulated financial or crypto services.
Know Your Customer is a set of identity verification and risk assessment procedures used by regulated financial businesses, including many cryptocurrency exchanges. It supports anti-money-laundering, sanctions, fraud prevention, and customer due-diligence obligations.
KYC can include collecting legal name, date of birth, address, government ID, proof of residence, source-of-funds information, and biometric checks. Businesses then assign risk levels and may monitor accounts over time.
KYC can improve compliance access, banking relationships, and fraud controls, but it also creates privacy, data security, and exclusion concerns. Poorly protected KYC databases can become high-value targets.
KYC identifies customers of a service; it does not automatically make every transaction safe or lawful. It is often paired with KYT, sanctions screening, transaction monitoring, and manual review.
Related terms
Anti-Money Laundering
→Laws and processes that aim to prevent illicit funds from being disguised as legitimate.
regulation · compliance
Cryptocurrency Exchange
→A cryptocurrency exchange is a platform for buying, selling, or trading digital assets through crypto or fiat markets.
trading · exchange · platform
ICO
→A token-based fundraising sale where a project sells new coins or tokens, often before the product is fully launched.
fundraising · event
IEO
→A token sale administered through a cryptocurrency exchange, combining fundraising with exchange-led onboarding and listing support.
fundraising · event
Decentralized Exchange
→A decentralized exchange (DEX) lets users trade digital assets from their wallets through smart contracts or peer-to-peer settlement.
trading · exchange · blockchain