Hello Binancians,
For those of you who are new to the crypto world, you must be wondering why every time you open a crypto account on an exchange, you are always asked to take a selfie while holding your ID or have to include important documents such as personal data, ID card or passport, sometimes the exchange also asks for proof of address listed on the electricity/telephone bill (for advance), bank statement, etc.

The above is usually called KYC (Know Your Costumer). KYC is requested by an Exchange not only as a formality, but also as a policy against anti-money laundering (AML). The main goal is to ensure that individuals who register on the exchange are as claimed and not criminals who want to use the exchange platform for their illegal purposes.

The existence of KYC is sometimes considered as something that limits the user's freedom of movement in crypto transactions. However, this is comparable to the security offered by an exchange for users.

In this article, I will discuss some of the benefits of doing KYC in the crypto world, so that friends can also avoid crypto criminals, as well as how to do KYC.

Benefits of KYC on Crypto Exchanges

  1. Prevent money laundering and fraud with KYC

    A crypto exchange can better identify and track users who have completed KYC. This will greatly help prevent fraud and money laundering.

  2. Compliance with regulations

    Regulations in several countries are getting stronger towards crypto transactions. The government requires exchange platforms to carry out KYC as a legal requirement for operating. And KYC is also used as a means of compliance with applicable laws in a country.

  3. KYC user protection

    With KYC, users will be protected from identity theft or other fraud.

  4. Safer and more transparent transactions

    The use of KYC will allow Exchange to monitor user activity and prevent illegal transactions.

  5. Increasing market confidence
    Crypto platforms that care about their users will certainly implement KYC to maintain user security so that the level of trust in the exchange platform increases.

  6. Making Account Problem Solving Easier

    By doing KYC, it will be easier for the exchange to solve user problems more quickly and accurately. For example, users have problems accessing their accounts or need to recover their accounts, with KYC the problem will be solved more quickly because there has been a previous verification process.

  7. Providing Access to Premium Services

    Some exchanges have tiers of service based on user verification. If a user has completed KYC, they can access premium services, such as higher withdrawal limits, access to exclusive investment products, or higher transaction services.

How to Do KYC Process

  1. Filling in Personal Information

    At this stage, users will be asked to fill in personal data such as name, address, date of birth, and other relevant information.

  2. Upload Identity Documents

    To complete the next step, users will be required to upload official identity documents such as KTP, passport, or SIM. To further facilitate identity validation, some platforms will require users to take a selfie holding their ID card.

  3. Additional Verification

    Some exchanges also have additional verification that users need to complete (optional), such as a video call or proof of address via a utility bill. Usually, platforms that do this additional verification are exchange platforms that have a high level of security such as Binance which is the number one crypto exchange in the world.

  4. Verification Process

    After all verification processes are uploaded, the exchange verification team will check the user's documents for validation and it will take several working days for the validation to be completed.

So, KYC or Know Your Customer is an important foundation in maintaining security, transparency, and compliance on various financial platforms, including crypto exchanges. With the implementation of KYC, platforms can verify the identity of users to ensure that they are genuine individuals, not criminals who want to take advantage of the anonymity of the digital world for illegal purposes. It also helps users avoid misuse of personal data by irresponsible people.