Topic: Why is KYC mandatory in CEX? - page 3. (Read 888 times)
KYC is a must in Centralized Exchanges primarily due to regulatory laws. Governments want to prevent money laundering and other illegal activities (and also track and see what people are doing with their money). So, for a CEX to operate legally in many countries, they're required to ask for KYC from their users. It's not just about legal laws, it's also for the safety of the exchange and its users. Without KYC, the exchange might be charged and convicted of helping in money laundering. And if people do P2P trades, there is a risk that the user might be receiving money that has been obtained from illegal source. The user might accidently become a part of a larger crime.
Besides not having to provide identity, I don't think DEX has anything superior to CEX. DEX liquidity is still very low so we will encounter many difficulties. I tried p2p trading on bisq and it took more than 1 day to contact the seller which is quite annoying if we need the money urgently. Moreover, if you are a day trader, DEX is not a wise choice as they do not offer too many trading pairs and features that cannot be compared with CEX. DEX is great for privacy, the rest are still not comparable to CEX.
DEXs are the future, even CZ said that in the next years, when cryptos will become more mainstream, people will have more knowledge about their use and DEXs will increase a lot in popularity. Right now too many users don't feel comfortable using them, and I understand it, it's like internet at the very beginning, just few people would use it, all the other would still rely on newspapers, television, radio, etc.DEX is not new, it has been around for a long time but for some reason until now it is still not more perfect and cannot compete on equal terms with CEX. DEX still seems to be slower and weaker than CEX in the battle for market share. I have also heard many people believe that DEX will be the future of exchanges, but so far CEX is still the place that people trust more even when there are many incidents and bankruptcies.
I don't want to disappoint you, but I seriously doubt that DEX will not be the future and surpass CEX. Since FTX collapsed and recently there was also bad news about bybit but then people turned to OKX instead of looking to decentralized exchanges like we thought.
Besides not having to provide identity, I don't think DEX has anything superior to CEX. DEX liquidity is still very low so we will encounter many difficulties. I tried p2p trading on bisq and it took more than 1 day to contact the seller which is quite annoying if we need the money urgently. Moreover, if you are a day trader, DEX is not a wise choice as they do not offer too many trading pairs and features that cannot be compared with CEX. DEX is great for privacy, the rest are still not comparable to CEX.
DEXs are the future, even CZ said that in the next years, when cryptos will become more mainstream, people will have more knowledge about their use and DEXs will increase a lot in popularity. Right now too many users don't feel comfortable using them, and I understand it, it's like internet at the very beginning, just few people would use it, all the other would still rely on newspapers, television, radio, etc.I also believe that DEX will soon have improvements and developments in the future because the demand for them is increasing. But my question is when will cryptocurrencies become more widely available and governments will introduce more regulations. Can DEXs exist if they do not comply with the law? Just as mixers are constantly targeted by the government for not complying with government regulations. Or highly anonymous currencies like Dash and XMR...have all become government targets, and they also want to eliminate them. Honestly, it is difficult to predict the future of DEXs.
Besides not having to provide identity, I don't think DEX has anything superior to CEX. DEX liquidity is still very low so we will encounter many difficulties. I tried p2p trading on bisq and it took more than 1 day to contact the seller which is quite annoying if we need the money urgently. Moreover, if you are a day trader, DEX is not a wise choice as they do not offer too many trading pairs and features that cannot be compared with CEX. DEX is great for privacy, the rest are still not comparable to CEX.
DEXs are the future, even CZ said that in the next years, when cryptos will become more mainstream, people will have more knowledge about their use and DEXs will increase a lot in popularity. Right now too many users don't feel comfortable using them, and I understand it, it's like internet at the very beginning, just few people would use it, all the other would still rely on newspapers, television, radio, etc. 
Indeed, that is the reason why CEX has KYC. Also, some of them can have a p2p wherein you can convert your crypto to your local currency via bank or any digital wallet that is also registered to the government. Actually, I am more into CEX than DEX, for me it is more safer and also some projects cannot list their token in cex without any docs and enough money to pay especially to tier 1 exchanges.
Besides not having to provide identity, I don't think DEX has anything superior to CEX. DEX liquidity is still very low so we will encounter many difficulties. I tried p2p trading on bisq and it took more than 1 day to contact the seller which is quite annoying if we need the money urgently. Moreover, if you are a day trader, DEX is not a wise choice as they do not offer too many trading pairs and features that cannot be compared with CEX. DEX is great for privacy, the rest are still not comparable to CEX.
KYC is important in centralized exchanges as they use it for profiling. They require customer information for some sort of data-correlation so they can use it for 2-factor authentication or something, and in some cases they require it to make sure that customers for withdrawals to make sure that they don't money launder. Other more viable options wouldn't really jeopardize the customer's identity on the line like Static IP addresses fetching to make sure that they aren't creating multiple accounts, but since these are easier to implement, and since it's a little counterintuitive to not ask for customer's information when you're already working with a centralized exchange, they might as well.
There is no cex without KYC and the reason for licensing, so to fulfil the regulatory mandate, the exchange must have to demand for customers' data and other vital information, but what has baffled me for some time now is that, despite all the KYC that have come along centralized exchanges still failed to protect the customers.Take the FTX issue for example, despite being a regulatory compliance exchange with customer mandatory KYC, its bankruptcy crisis still fell on the customers who lost a huge sum of money running into millions or billions of dollars, so if the regulator had an interest in the customers at heart while issuing a license to cex, there should be some form of insurance of the customers and collecting KYC should be in that regard of settling potential crises such as this, to protect the exchange users from losing funds.
Indeed, that is the reason why CEX has KYC. Also, some of them can have a p2p wherein you can convert your crypto to your local currency via bank or any digital wallet that is also registered to the government. Actually, I am more into CEX than DEX, for me it is more safer and also some projects cannot list their token in cex without any docs and enough money to pay especially to tier 1 exchanges.
KYC is important in centralized exchanges as they use it for profiling. They require customer information for some sort of data-correlation so they can use it for 2-factor authentication or something, and in some cases they require it to make sure that customers for withdrawals to make sure that they don't money launder. There are other more viable options that wouldn't really jeopardize the customer's identity on the line like Static IP addresses fetching to make sure that they aren't creating multiple accounts, but since these are easier to implement, and since it's a little counterintuitive to not ask for customer's information when you're already working with a centralized exchange, they might as well.
The exchange want to know they customer in process of (KYC) simply means know your customer, by so doing that the exchange as well know the actual active users of the exchange in other words to limit money laundering in the exchange and also stopped multiple users in the exchange platform, like wise not participate airdrop with a multiple accounts, one user, one entry point.
This isn't exactly why exchanges ask for KYC actually in my opinion. They are obliged to follow government rules. Because to operate centralized exchanges they must need to get licenses from the government. Money Laundering is just an excuse actually. We have seen exchanges even ask for KYC and proof of source funds. That's ridiculous actually why they should ask for source funds. But most probably legal authorities force them sometimes. Exchange just wants to make ready everything and provide data to legal authorities when necessary. Customers do not protest this if they do not do it, all features will be locked if they want to continue then do KYC, such are the demands that exchanges face now.
On the grounds that they want to know the legitimate source of funds, (but I don't think they care about that) it is worth saying that now most exchanges KYC is a necessary thing.
The exchange want to know they customer in process of (KYC) simply means know your customer, by so doing that the exchange as well know the actual active users of the exchange in other words to limit money laundering in the exchange and also stopped multiple users in the exchange platform, like wise not participate airdrop with a multiple accounts, one user, one entry point.
This isn't exactly why exchanges ask for KYC actually in my opinion. They are obliged to follow government rules. Because to operate centralized exchanges they must need to get licenses from the government. Money Laundering is just an excuse actually. We have seen exchanges even ask for KYC and proof of source funds. That's ridiculous actually why they should ask for source funds. But most probably legal authorities force them sometimes. Exchange just wants to make ready everything and provide data to legal authorities when necessary. Customers do not protest this if they do not do it, all features will be locked if they want to continue then do KYC, such are the demands that exchanges face now.
On the grounds that they want to know the legitimate source of funds, (but I don't think they care about that) it is worth saying that now most exchanges KYC is a necessary thing.
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such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
If they are just ordinary traders, 2000 USDT is a lot of money and there will be no limit set. such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
Binance is the best place at the moment, although the actual KYC implementation is also quite strict
Already several years ago, many said that regulators in most countries of the world would increase pressure on CEX over time. As we see, this is what happens. But there will also be developers who will create platforms without KYC, it’s just a constant struggle. But over the past years, I would say that the regulation of the CEX and the tightening of the KYC tip the scales on this scale. I wouldn't like there to be complete anonymity, probably in the form that it is now in CEX I am satisfied. On the other hand, further tightening will look too harsh.
My experience has shown that while a totally decentralized exchange is intriguing, it lacks consumer protection features like existing financial services. Crypto enthusiasts should acknowledge this trade-off and agree on KYC limits. Staying static or using outmoded approaches is not an option in a fast-changing world. I support continued conversation to balance security and privacy.
The balance between security and privacy is the best it can be for me at the moment. In any case, development in the field of crypto is proceeding at a rapid pace and perhaps soon we may see something that we are not even aware of.
Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?
Just because you're transacting small Bitcoin doesn't mean you're not an individual that is engaging in illegal activities like money laundering or other crimes. Judging from the exchange point of view, KYC is needed by everyone because they want to monitor everyone transaction and know what their users are using their Bitcoin for. KYC is just way of the government monitoring everyone and doesn't do any good thing for the users bit does good for the centralized exchanges.
They only make it sound like KYC are good so we don't fight them and just accept whatever they're telling us. KYC is a must for those cex exchanges under the government control but not all agree to accept their controlling behavior and that's why we have CEX with no KYC.
-snip-
such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
If they are just ordinary traders, 2000 USDT is a lot of money and there will be no limit set. such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
Binance is the best place at the moment, although the actual KYC implementation is also quite strict
Already several years ago, many said that regulators in most countries of the world would increase pressure on CEX over time. As we see, this is what happens. But there will also be developers who will create platforms without KYC, it’s just a constant struggle. But over the past years, I would say that the regulation of the CEX and the tightening of the KYC tip the scales on this scale. I wouldn't like there to be complete anonymity, probably in the form that it is now in CEX I am satisfied. On the other hand, further tightening will look too harsh.
My experience has shown that while a totally decentralized exchange is intriguing, it lacks consumer protection features like existing financial services. Crypto enthusiasts should acknowledge this trade-off and agree on KYC limits. Staying static or using outmoded approaches is not an option in a fast-changing world. I support continued conversation to balance security and privacy.
-snip-
such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
If they are just ordinary traders, 2000 USDT is a lot of money and there will be no limit set. such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
Binance is the best place at the moment, although the actual KYC implementation is also quite strict
Already several years ago, many said that regulators in most countries of the world would increase pressure on CEX over time. As we see, this is what happens. But there will also be developers who will create platforms without KYC, it’s just a constant struggle. But over the past years, I would say that the regulation of the CEX and the tightening of the KYC tip the scales on this scale. I wouldn't like there to be complete anonymity, probably in the form that it is now in CEX I am satisfied. On the other hand, further tightening will look too harsh.
Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?
Yes privacy is important that's why Exchanges also store kyc documents securely. The reason for taking kyc is to keep users in a loop. and avoid incidents like money laundering. CEX has a core team and they don't hide their identity so if money laundering happens through an exchange then the government of the country from which the money is laundered will take legal action against that exchange. And in this case if the exchanger does not take kyc from their customers then they will not be able to identify the money launderer. And that's why now CEXs are making kyc mandatory. 
Privacy is important when it comes to Cryptocurrency, so why do exchanges like Bitget require KYC (Know Your Customer) for all users, even those who only want to get airdrops? I thought KYC should be for those transacting many Bitcoins, Is it really necessary for everyone?
KYC is the universal way to avoid legal issues, since, firstly, any anonymous money transfers are a subject of suspicions from the officials' point of view. Secondly, there are thousands of individual collisions (person vs person), which can also end up in court, some of them include cryptocurrency and cryptotrading problems... So all the payment histories should be clearly identified in order to figure out responsibilities...
For international exchanges with a large user base, the KYC (Know Your Customer) process doesn't need to be as stringent as those overseen by government-regulated exchanges, such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
The solution is to consider switching to a different exchange platform and not remain bound to one that imposes complex rules on its users.
I don't think that rule above still applies for Binance available withdrawing more than $2,000 in daily day for user who haven't completed KYC, current update all Binance user need to verifying their account if want trade, deposit and withdrawing fund in this CEX exchange platform. Its not problem about why have CEX exchange still required with KYC because government intervention make this situation for CEX exchange have to complete this rule and make the exchange operation still running well. The solution is to consider switching to a different exchange platform and not remain bound to one that imposes complex rules on its users.
Current feature with many CEX exchange available with P2P trading make us have to complete with KYC, in Binance, Kucoin and several CEX exchange have feature with P2P and required for passing KYC to make us easily selling assets through this feature without need deposit or withdrawing trough local CEX exchange market.
The exchange want to know they customer in process of (KYC) simply means know your customer, by so doing that the exchange as well know the actual active users of the exchange in other words to limit money laundering in the exchange and also stopped multiple users in the exchange platform, like wise not participate airdrop with a multiple accounts, one user, one entry point.
This isn't exactly why exchanges ask for KYC actually in my opinion. They are obliged to follow government rules. Because to operate centralized exchanges they must need to get licenses from the government. Money Laundering is just an excuse actually. We have seen exchanges even ask for KYC and proof of source funds. That's ridiculous actually why they should ask for source funds. But most probably legal authorities force them sometimes. Exchange just wants to make ready everything and provide data to legal authorities when necessary. 
-snip-
At the end of the day it is always our choice if we want the convenience with KYC or the cons of using decentralized exchange.
Yup, it's just a choice, about privacy being taken care of or leaving it to the centralized Exchange. At the end of the day it is always our choice if we want the convenience with KYC or the cons of using decentralized exchange.
Some centralized exchanges also only apply KYC to certain withdrawals and it is not binding to fully submit KYC.
Many people do KYC but they try to falsify their identity, and now it's even easier to do so because technology is getting more sophisticated.
Decentralized exchanges like DEXs would be a good choice without having to provide any ID or KYC, but be careful as many DEXs are managed by scammers.
-snip-
such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
If they are just ordinary traders, 2000 USDT is a lot of money and there will be no limit set. such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.
Binance is the best place at the moment, although the actual KYC implementation is also quite strict
The exchange want to know they customer in process of (KYC) simply means know your customer, by so doing that the exchange as well know the actual active users of the exchange in other words to limit money laundering in the exchange and also stopped multiple users in the exchange platform, like wise not participate airdrop with a multiple accounts, one user, one entry point.
For international exchanges with a large user base, the KYC (Know Your Customer) process doesn't need to be as stringent as those overseen by government-regulated exchanges, such as Binance, which enforces a withdrawal limit of 2000 USDT per day for users who haven't completed KYC. I believe that for the purposes of airdrops, very few participants receive more than 2000 USDT daily, so Binance's KYC regulations still appear quite reasonable.The solution is to consider switching to a different exchange platform and not remain bound to one that imposes complex rules on its users.
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