FinCEN, the Financial Crimes Enforcement Network, has recently announced that KYC (Know Your Customer) is now mandatory for most crypto exchanges. This comes after an increase in regulation of cryptocurrency exchanges under federal law. Do all crypto exchanges have KYC? How are they being regulated by FinCEN? What does this mean for customers? We’ll answer these questions and more in today’s blog post!
Do all crypto exchanges have KYC?
No, but the majority of them do. There are some exceptions – decentralized exchanges like EtherDelta and IDEX don’t require verification because they aren’t linked to specific accounts or wallets in a user’s name. And there are also peer-to-peer exchanges where users can buy tokens directly from other users without an intermediary.
How are crypto exchanges being regulated by FinCEN?
FinCEN is regulating exchanges under the Bank Secrecy Act (BSA). The BSA was created in 1970 to fight money laundering and terrorism financing. It requires financial institutions, including crypto exchanges, to keep track of their customers and report any suspicious activity.
What does this mean for customers?
Customers will need to provide personal information, such as their name, address, and date of birth, in order to trade on most exchanges. They’ll also have to provide identification documents like a driver’s license or passport. This is so FinCEN can track the transactions of each customer and ensure that they’re not laundering money or funding terrorism. These regulations were created to improve transparency and protect the U.S financial system, so customers should welcome them!
KYC is now mandatory for most crypto exchanges in order to comply with federal regulations. This will help protect customers and improve transparency in the cryptocurrency market. Thank you for reading!
