Know Your Customer (KYC) is a requirement established by several regulatory bodies around the world, especially in the financial industry. The KYC process involves identifying and verifying the identity of a customer while performing a series of checks. KYC thus forces financial service providers to monitor their customers for signs of illegal activity. In effect, it is the opposite of "bank secrecy" in certain regions. KYC was created as a measure to combat money laundering, terrorism and tax evasion.
Casinos, banks, fintech companies, and other financial service providers must implement identity verification procedures, collecting detailed KYC data from customers to perform their due diligence.
The reason is obvious, anonymous financial transactions make it too easy for bad actors to carry out their potentially criminal activities undetected.
Currently, many cryptocurrency transactions are still an exception to the KYC rule.
Government regulation of cryptocurrencies is expected to increase to some degree in the coming years.
Probably the most popular ways to buy cryptocurrencies without KYC regulations are decentralized exchanges and crypto ATMs.
KYC requirements continue to vary widely around the world.
