These are KickAcademy KYC research results!
This time, we studied the user attitude towards KYC
(“know your customer").
🔷The survey showed that more and more people trust their digital assets and trade on cryptocurrency exchanges with KYC in place.
🔷The number of users who are positive about KYC is 4 times larger than those who feel extremely negative about it.
🔷Almost half of the respondents understand the importance and benefits of completed KYC.
KickAcademy survey: more and more people trust their digital assets to and trade on cryptocurrency exchanges with KYC procedures enabled
What is KYC?
Regulators around the world are working to create global standards for the KYC (abbreviation for know your customer). These standards apply to the financial, technological sectors, and cryptocurrencies. The technology sector, that began with anonymous peer-to-peer payments is now aiming towards the security of traditional finance, which means compliance with the KYC. It is a security standard that helps to verify and confirm the identity of the client. Its essence is that users of the service, upon registration or after it, must provide documents proving their identity (usually a passport, driver's license, photo or selfie).
Between 2000 and 2010 in most jurisdictions, such as the United States and Canada, most of the European countries, Russia, South Africa, India, Singapore, South Korea, China and Japan (these are just some countries) adopted the legislation on KYC and AML procedures (anti-money laundering). As a result, banks and related financial institutions started to comply with the requirements of anti-money laundering legislation.
In the crypto community, the KYC procedure was onboarding with skepticism, as users were afraid to disclose their data, which could fall into the hands of scammers. Moreover, according to many crypto users, the KYC procedure contradicted the very idea of anonymity when using cryptocurrencies. However, with the growth of popularity, the development of infrastructure, and the adoption of the cryptocurrency payments in many countries around the world, the opinion of most users has changed.
A KickAcademy poll among 624 respondents from Indonesia, USA, Russia, India, and Vietnam and a number of other countries actively trading crypto assets on exchanges indicates a change of opinion among the community of active crypto-users.
1. Is it mandatory to go through KYC procedure on exchanges where you trade?
2. How do you feel about the KYC procedure on exchanges?
3. In case of loss of access to the exchange account or its blocking due to suspicious activity, KYC allows you to speed up recovery. Is this KYC advantage valuable to you?
4. KYC prevents access to the market of assets of individuals from countries under sanctions and market participants with a dubious reputation, eliminating the risks for others to get potentially distressed assets. Is this KYC advantage valuable to you?
5. Have you encountered a situation where the exchange on which KYC is not mandatory suddenly froze your assets and obliged you to go through the procedure?
6. How should the KYC procedure affect trading and deposit and withdrawal limits?
7. Passing KYC for trading on the exchange is a requirement of state regulators. Compliance with these requirements by market participants will allow them in the future — after the adoption of legislation in the field of cryptocurrencies, — to have the access to state insurance mechanisms, asset storage, convenient conversion into fiat money and so on. Is this KYC advantage valuable to you?
8. Undergoing KYC for trading on the exchange is a requirement of state regulators. Compliance with these requirements by market participants will force them in the future — after the adoption of legislation in the field of cryptocurrencies, — to pay tax (and in some countries, it is already in force). How negative do you find this feature of the KYC procedure?
9. Many exchanges in their referral programs reward users for completing the KYC procedure. Is this KYC advantage valuable to you?
10. There is an opinion that exchanges sell or somehow illegally use the personal data of users obtained after passing the KYC procedure. How real do you think this risk of completing the KYC procedure is?
My own opinion - I don't like to pass KYC in any crypto projects because
The main advantage of privacy-preserving cryptocurrencies is they increase the client's anonymity set from relatively small sets of clients that use a particular mixing service or participate in a transaction, to large sets that include all the users of a given cryptocurrency.
But I can agree with:
Regulations imposed by the government of the country the exchange is operating within (eg unverified customers can only withdraw a certain amount)
The majority of the exchange's coin reserves are held in an offline, cold storage wallet. So a very large withdrawal may require more coins than the exchange has available in an automated hot wallet (this is a security consideration)
People constantly pursue to be anonymity but always lose what they have at that moment...
Thanks for reading!
What do you think about KYC/AML & do you like to pass KYC in any projects?