Key Takeaways
Quick answer
KYC, short for know your customer, is the process a financial firm uses to identify and verify its customers. Crypto platforms covered by these rules ask for details such as your name, date of birth, address and ID. The FBI warns against services that skip KYC when it is required.
- KYC is the identity check a financial firm runs on its customers.
- Anti-money-laundering rules in the US and UK apply to crypto exchanges, and the FBI warns against services that skip KYC.
- Passing KYC verifies you, not the platform, so check the firm separately.
What does KYC actually involve?
The term comes from traditional finance. FINRA Rule 2090, which applies to US brokerage firms, requires them to use reasonable diligence “to know (and retain) the essential facts concerning every customer”. The Financial Crimes Enforcement Network (FinCEN) sets out four core elements of customer due diligence for the institutions its rule covers: identify and verify customers, identify and verify the owners of companies opening accounts, understand the purpose of the relationship, and monitor for suspicious transactions.
Why do crypto platforms ask for KYC?
Because anti-money-laundering rules reach them too. In the US, FinCEN guidance from 2013 treats businesses that exchange virtual currency as money transmitters, unless an exemption applies. In the UK, the Financial Conduct Authority (FCA) says crypto exchange providers and custodian wallet providers must comply with the Money Laundering Regulations and register before offering in-scope services.
The FBI’s Internet Crime Complaint Center (IC3) goes further: “Beware of financial services that do not ask for KYC information including name, date of birth, address, and ID before allowing you to send or receive money or cryptocurrency.”
Does passing KYC mean a platform is safe?
No. Verifying you says nothing about the firm’s own soundness. FinCEN states that appearing on its money services business list is not an endorsement and that it does not verify what businesses submit. Check a firm yourself using our guide to checking if a crypto firm is authorised.
What are the risks around KYC?
- Skipping it. The IC3 warns that people using unlicensed services may face financial disruptions during law enforcement actions.
- Fake verification requests. Your ID is valuable to criminals. Upload documents only through the platform’s real site, never via a link someone sends you; see clone firms.
Frequently asked questions
Do decentralised exchanges require KYC?
Often not. The US Treasury’s 2023 DeFi risk assessment notes that “when using a DEX, users are often not required to provide personal information, as typically required by many centralized exchanges”. It adds that DeFi services which act as financial institutions under US law still carry anti-money-laundering duties.
What documents are usually requested?
The IC3 lists the basics: name, date of birth, address and an identity document. Platforms may ask for more under their own rules.
Article Sources
7 sources
Blockhorizon checks every figure, date and quotation against primary sources: regulators, statistics bodies and original technical documents. Read our editorial policy.
- FBI IC3, Alert on Cryptocurrency Money Services Businesses (Apr 2024) — ic3.gov (accessed 2026-10-02)
- FINRA Rule 2090, Know Your Customer — finra.org (accessed 2026-10-02)
- FinCEN, Information on Complying with the Customer Due Diligence (CDD) Final Rule — fincen.gov (accessed 2026-10-02)
- UK Financial Conduct Authority, Cryptoassets: AML / CTF regime (updated Feb 2026) — fca.org.uk (accessed 2026-10-02)
- FinCEN, MSB Registration Web Site — fincen.gov (accessed 2026-10-02)
- FinCEN, FIN-2013-G001: Application of FinCEN's Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (Mar 2013) — fincen.gov (accessed 2026-10-02)
- US Department of the Treasury, Illicit Finance Risk Assessment of Decentralized Finance (Apr 2023) — home.treasury.gov (accessed 2026-10-02)