On every centralized exchange and on some decentralized sites and other cryptocurrency services today it is necessary to go through the verification procedure or KYC. This controversial procedure for many raises questions from users who go through it. Let’s see why verification is so necessary on exchanges.

Everyone needs verification on exchanges

When registering on any CEX exchange, you will be asked to go through the so-called KYC procedure. You will need to leave your passport details and a photo and link them to your account on the exchange. Only in this case, you can safely use the services of such platforms.

I would like to note that some exchanges completely restrict access to depositing and withdrawing funds if you have not verified your identity. Some only introduce certain prohibitions, for example, on withdrawing funds, but not on depositing. But in any case, it is simply impossible to use the services of the exchange normally without KYC.

Misconceptions about why exchanges ask for your data

Many people think that this data can be set against him in the case of any government proceedings, or even worse, they will simply leak all the data to the dark web.

This is not the case, the personal data of exchange users are under strong protection and will never get to third parties. Also, the exchange does not have the right to disclose your data just like that, even to government agencies. Only if it is required by a criminal investigation, and there are all resolutions, permissions and documents for the withdrawal of information about transfers from the exchange, linked to the user’s personal data.

Verification on exchanges: the real reason for KYC

In fact, all exchanges collect your data so that terrorists, intruders and those who want to “launder” funds through an exchange cryptocurrency account do not use their services. This they were obliged by the regulators of different countries around the world. Recently, they began to force crypto exchanges to carry out verification procedures for their users. First of all, this is a safety guide, and not a tool for total control.

Therefore, you should absolutely not be afraid to pass verification. If you are a law-abiding citizen, then KYC on the exchange is absolutely not dangerous for you.