KYC is short for “know your customer” or “know your client”.
KYC is the process of a business, involved with financial transactions, to identify and verify the identity of customers.
When you set up an account with a crypto exchange, you’ll typically be asked to go through the KYC process.
This is a standard identity verification that crypto exchanges require for anyone who wants to trade crypto.
When you complete KYC, you’ll be able to deposit money to buy and sell crypto and make withdrawals.
The purpose of KYC is to confirm that a customer is who they claim to be and to prevent illegal activities, such as money laundering, evading taxes and funding terrorist groups.
If a crypto exchange doesn’t perform Know-Your-Customer (KYC), then it could be liable for those kinds of illegal activities.
Some crypto exchanges may allow you to create an account without the KYC process, but the account will have restrictions such as limitis on the amount of money you’re able to deposit or withdraw from the account.