Crypto exchange KuCoin is set to mandate know-your-customer (KYC) procedures for all clients starting July 15.
Users must complete KYC to fully access KuCoin's products and services, or they will face limitations, the exchange operator said Wednesday. If KYC procedures are not completed, users will only be able to use services such as spot trading sell orders, futures trading deleveraging, margin trading deleveraging, "earn" product redemptions and ETF redemptions, KuCoin said. They will not be able to make deposits to the exchange but they can withdraw.
The move comes four months after New York State Attorney General Letitia James sued KuCoin, saying the crypto exchange is an unregistered commodities and securities broker or dealer. KuCoin rival Binance was also recently charged by the U.S. Commodity Futures Trading Commission, where the regulator said Binance designed “special policies and procedures to help VIP customers evade both IP address-based compliance controls and KYC documentation-based compliance controls.”
The updated KYC policy is to "better comply with the applicable regulatory requirements," KuCoin CEO Johnny Lyu told The Block. "As users provide more information to complete their profiles, we will offer users a wider range of platform products and services, including but not limited to higher daily withdrawal limits, more comprehensive trading tools, and a greater variety of user activities," Lyu said.
KuCoin's updated KYC policy
KuCoin's total trading volume this month to date is above $15 billion compared to Binance's over $211 billion, per the dashboard. Given the new KYC policy, Lyu said there could be "a short-term decline in trading volume, but in the long run, mandatory KYC is highly beneficial for combating malicious activities within the industry, protecting the funds of users/partners, and establishing a healthy and sustainable ecosystem."
"We also believe that our users will adapt to changes and support our initiatives," Lyu added.
Last year, KuCoin was valued at $10 billion when it raised $150 million in a pre-Series B funding round. Investors included Jump Crypto, Circle Ventures, IDG Capital and Matrix Partners.
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