Important questions for anyone using a crypto exchanges

[Trêvoid]

Hello everyone!

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

[EL MOHA]

Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

We might be going back and forth on the reason why exchanges requires KYC from the stories like they are doing it to help safeguard users from money laundering, theft and many things like that but seriously the standout answer is just to simply comply with regulations. Most countries requires exchanges to actually verify their customers for compliance with anti money laundering regulations and that’s is the primary reason behind it, all other reasons are simply excuses.

As for what happens to the details then that is where the KYC provider needs to careful, there are platforms that can easily give out this details to other people like the government when they request for it or easily any attack on that particular exchange can lead to the hackers getting access to those informations which can be used to later for social engineering attacks on those having those identity

[Hazink]

Personally, I have not encountered any crypto exchange that asks me to go through my KYC verification after it has been passed and verified for the first time. Maybe they have not seen the need for that, and if they even do, it could be a result of trying to check how updated the information is, as they might be keeping tabs on me. If I don’t have anything to lose in that exchange, the best is to leave.

Once you hand over your personal data to a crypto exchange, just know that you have agreed indirectly to share your information with other parties; that information is no longer private. Those third-party companies that are mostly used to check the data and verify if it’s real or not can also make use of it for their own personal interest.

[Sammye3]

Hello everyone!

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

I believe KYC verification is an important factor when it's comes to securing finances. It's a way of proving your validation because even big banks need this information to help secure your funds. They're have being several occasions of creating a fake account with someone else's details which poses as fraud so the introduction of verification including facial verification and identity verification are key factors. Exchanges are end to end encrypted so your provided details are sure to be safe and not being accessed by externals which makes it safer and more reliable.

[Perfectbaby]

If you aren't that comfortable with kyc exchange which is to be Centralized exchange I will advise you to use decentralized exchange that doesn't require you to pass any kyc before trading on that exchange. But one thing you must understand is that before they does that for their documentary if in any way you get involved with AML then you could be easily tracked and not really needed your documents to access the exchange. I could remembered that there are some exchange you would just pass level 1 kyc then you are free to make withdrawals and deposit, and this level 1 is only full names and email verification that is all they don't need your personal documents but nowadays they are becoming more stringent about their rules.

[sheenshane]

First, we must consider a known and trusted exchange before we use it.
From the start, we know that we submitted our personal information into a legitimate exchange.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

They have staff to check it, AFAIK, it will be handled by other parties if someone asks them, like law enforcement, if fraud is linked to an exchange, in that way, it will be easier for them to solve the case.
Another one is the regulators and authorities for the tax reporting.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

It's simply to avoid money laundering since bad actors commonly use crypto.
AML sometimes helps those authorities to track hackers down.

But if you're afraid of all of these, why not use a decentralized exchange where data and information aren't needed at all?

[ultrloa]

Hello everyone!

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

Most of these exchange especially the big ones gets third part providers that specialize securing identity verification and data handling.

This submission is really risky since we don't know on when those third party providers could able to make our identity secure.

Also look at what happen on Coinbase before https://cointelegraph.com/explained/coinbase-data-breach-2025-what-was-stolen-and-what-you-need-to-know they experience this issue which expose lots people of some huge risk that they can't imagine.

But we don't have any choice since we need to comply on the requirements asked by the government. So what we need to do is to be prepared for possible situation like that will happen and be cautious on offers what we are receiving to avoid getting scam or compromised.

[cryptomaniac_xxx]

Hello everyone!

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

As far as I know they have a 3rd party that do all the KYC for a certain crypto exchanges, so they don't actually hold our data but this 3rd party. Regarding your question, they have to comply to laws from authorities, like AML or anti-Money-Laundering that's why it is not mandated to do that. I know, it really defeat the purpose of crypto because decentralized and everything. But this is the new world that we live in, there are government around the world that wanted to control because they are afraid that crypto might be used as a instrument for bad things, i.e to be used by criminals. So as much as we don't want it to be like that, we don't have a choice but to accept that fact. It's either you stay away, or submit your data to exchanges to be able to trade or used any other services.

[Despairo]

Why does the exchange really need your data

To fulfill the regulations requirement.

what do they do with it

Don't know, the worst is they sell the data.

who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

Many entities, from the workers who work in that exchanges, third parties who cooperate with the exchanges to government.

People simply don't care with privacy and their personal information because they care more about the money. if they use no KYC exchange, they need to pay premium, extra fees and spend more time (time is money), so centralized exchanges are their best option.

[hd49728]

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

They do this because their business (exchanges) must obey the existing laws and KYC requirements from governments, I agree. I disagree with you that they are doing this because KYC keeps things secure. It is not, exchange security has nothing related to KYC policy.

We know.
Why KYC is extremely dangerous – and useless.

KYC-exchanges don't make compensations to users if their exchanges were hacked and they wanted scam exits or no longer had enough finance for this compensation action.

The exchange graveyard can make many people fearful about CEX. Exchanges rested in peace but users who lost money could not rest in peace!
Exchange graveyard.

[Peanutswar]

Actually there are some exchanges there does not seek with that KYC you’ve mention having a basic email address is some enough with this but of course basic accounts information only got a limited access on it so reason why some of them comply a KYC well if you care much about the details or your basic information you can use the DEX at least.

[tbct_mt2]

Actually there are some exchanges there does not seek with that KYC you’ve mention having a basic email address is some enough with this but of course basic accounts information only got a limited access on it so reason why some of them comply a KYC well if you care much about the details or your basic information you can use the DEX at least.

There are centralized exchanges with no KYC requirement, even basic like phone number. However, with a global trend of stricter regulations on Bitcoin and cryptocurrency industry includes the exchange industry, I believe that more centralized exchanges will do KYC as a standard mandatory policy on all registered users globally.

If their exchange owners are known, it's risky to run their exchange business without KYC to comply with laws and to be safe from government threats. Many centralized exchanges and owners had to pay high costs with their KYC and AML policies in the past.

[Tmoonz]

Hello everyone!

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

Just ask the name implies kyc that is know your client, the exchanges want to know the identity for as many that is their users is more like a registered showing the eligible users to have full access of using their exchange and not by an unknown user, the kyc is the only way they can identify and verify user for ownership of accounts for answerability, of course is a compliance protocol which we might not completely say that our data is safe with them like given out our personal information lets wish such bad day never comes.

[Oshio-man]

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

I think the teams are doing all those things to make sure cryptocurrency exchange users are safe in any transaction they want to carry out from the exchange market, without a username, it will be difficult for people to identify who they are transacting with in the exchange market which is very important for the cryptocurrency exchange teams to demand for your name, your address, passport, photo and ID, the prevention is that, it will be difficult for scammers to use your identity to scam other users in the exchange, it will make the coins you want to exchange to enter your wallet easily, it will make other traders or investors to know that you are the one using the cryptocurrency exchange for transaction.

[KiaKia]

We are indeed going back and front on this same discussion about KYC over and over, have you ever heard about people getting some kind of unfair treatment because they pass KYC on a centralised exchange? The answer is no.

Many exchanges have turned into scam and they close their businesses, I have passed KYC on such exchanges before, nothing happened and it's been many years already.

Now let's turn the table around, how many times have we heard about money laundering hunt on hackers and fraudsters getting caught through the help of online exchanges? I will go first, they are many.

So KYC verifications do prevent bad people from escaping their nemesis, isn't that good enough for you? It is you that feel like KYC verifications makes no sense, and that's because you are a customer, it won't be the same if it's the other way around.

[EarnOnVictor]

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

It's obvious, and anyone who is experienced with cryptocurrency and financial flows should know that AML is the major reason for that. The government wants everyone to be accountable, and they also want to tax exchanges appropriately.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

The limit is to force you to do the KYC and to satisfy the restriction limit stipulated by their regulators. As for who is handling it, you never can tell, my brother. All I know is that our data often gets leaked.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it?

This is the least of what people should naturally know, so why ask again? Well, if it is to satisfy your curiosity, why not? But it changes nothing, and you are free to walk away, it's a choice.

[examplens]

Are these rhetorical questions, or is there really a dilemma?

Depending on the mood, there may be different answers. For example, KYC is a great thing because it gives the user additional security, and in case of losing access to the account, it is much easier to prove ownership of it. KYC information is unique (at least it should be). Personal data will only be used for identity verification and no other purpose. I don't see why users are so hesitant.

At some point, we have all given our information somewhere, even if it was a traditional bank. Where is the request for a guarantee that banks carefully store user information? In my city, the server of the state utility company, in charge of bills, was recently hacked. More than 2TB of data was leaked, so I can forget all my efforts about privacy, because it was canceled due to my electricity bills. 

Of course, I am against KYC, especially when even the smallest exchange requires it. It is even more absurd where some anonymous exchanges require KYC information about users, while they are registered in some offshore zones, and it is not known who the real owner is.

[BitGoba]

Hello everyone!

A lot of cryptocurrency exchanges these days ask users to go through KYC checks, mostly to follow the law and keep things secure.

But have you ever wondered why exactly they do this? Is it just about obeying rules, or is there something more to it?

Cryptocurrency exchanges typically need name, address, passport, photo ID, etc. to ensure you are who you claim to be, which aids in the prevention of fraud and money laundering.

But do they handle this process themselves, or are they hiring other companies to check your details? And how safe is your information once you hand it over? Some platforms also set limits on your account if you haven’t completed KYC.

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

This is just another distraction  something that hides a deeper agenda behind what’s being presented publicly. The real reason they’re doing this is explained in detail in the video linked below.

But you have to watch the entire video (it’s about 40 minutes long) to truly understand what the real issue is and why these kinds of distractions are being pushed. It breaks everything down clearly and shows what’s really going on behind the scenes.

https://www.youtube.com/watch?v=YtFOxNbmD38

[Hewlet]

If you’re curious about these things, it’s fair to ask of course: Why does the exchange really need your data, what do they do with it, and who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.

if not for the fact that the issue of data privacy is a subject that has become of serious concern to everyone involved in the crypto space due to how unsafe the digital space has degenerated to, it would not have been an issue that we are expected to submit our information for check while using an exchange since the aim is mainly for the good of all the users of the exchange.

of cause, as long as you are dealing with an exchange, the issue of decentralization is no longer going to be as completely strong as it ought to be. there is a third party involve and for that reason, you don't completely have an 100% control over your funds, data and privacy. it is the reason why you can keep your private keys safe and the exchange gets hacked and your funds get stolen. as long as you are dealing with an exchange, the risk involved is much and hence, KYC is just one of the means through which you are exposed to a third party.

[Iroh]

Most exchanges would probably have a third party company do these verification checks. So be sure to note that when you give out your information to get verified on such exchanges.

KYC do have its uses as it helps one to prove ownership of an account amongst other things. Great for people who don't mind giving a great deal of control to the exchange holding and managing their funds.
About the data collected and who gets to see it? Who knows.. it could always be shared, sold or stolen. Once it's out there, it's out there.