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KYC
(Know Your Customer)
KYC (Know Your Customer) refers to financial regulations requiring institutions to verify client identities to prevent fraud, money laundering (AML), and terrorist financing. Processes include ID checks, address verification, and monitoring transactions.
Mandated by regulators like the SEC and FINRA, KYC is critical when opening bank accounts, trading accounts (e.g., NYSE brokers), or crypto exchanges. Post-9/11 laws (Patriot Act) strengthened KYC requirements. While it adds friction (e.g., document uploads), KYC protects both institutions and customers. DeFi platforms face challenges balancing KYC with crypto's pseudonymous ethos. The CFTC fines firms for non-compliance (e.g., $100M penalty against Binance in 2023).
Mandated by regulators like the SEC and FINRA, KYC is critical when opening bank accounts, trading accounts (e.g., NYSE brokers), or crypto exchanges. Post-9/11 laws (Patriot Act) strengthened KYC requirements. While it adds friction (e.g., document uploads), KYC protects both institutions and customers. DeFi platforms face challenges balancing KYC with crypto's pseudonymous ethos. The CFTC fines firms for non-compliance (e.g., $100M penalty against Binance in 2023).