🔐 KYC & AML on Crypto Exchanges: What They Actually Are (And Why You Can’t Skip Them)

If you’ve ever wondered why Binance asks for ID verification before you can fully use the platform, here’s the plain English version.

KYC (Know Your Customer)

This is the identity verification step. It usually involves uploading a government issued ID and, depending on the platform and your circumstances, a selfie, proof of address, or other information.

Exchanges do this mainly because financial regulations require them to know who their customers are and to take measures against money laundering, fraud and terrorist financing.

International standards such as those developed by the Financial Action Task Force (FATF) require virtual asset service providers to apply customer due diligence and other anti money laundering measures. Countries then implement these standards through their own laws and regulations. (fatf-gafi.org)

So when Binance asks for your ID, it isn’t simply being “nosy.” KYC is part of the broader AML compliance system used by financial institutions and crypto exchanges around the world.

And KYC is only one part of the picture. There is also AML, transaction monitoring, risk based verification and, in some cases, additional checks when a transaction or account activity appears unusual.

In simple terms, KYC answers one basic question:

“Who are you?”

AML then focuses on another:

“Is the money moving through the platform connected to suspicious or illegal activity?”

That’s why exchanges may sometimes ask for additional information or flag certain transactions.

#kyc #aml #Binance #CryptoCompliance #BinanceSquare