Why do many centralized exchanges require identity verification for sign-up in the world of cryptocurrencies?

4 answers

• Nov 28, 2021 · 3 years ago
  Identity verification is a common practice among centralized exchanges in the world of cryptocurrencies. It helps to ensure compliance with anti-money laundering (AML) and know your customer (KYC) regulations. By verifying the identity of users, exchanges can mitigate the risk of fraudulent activities and money laundering. Additionally, it helps to establish a level of trust and security for both the exchange and its users.
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• Nov 28, 2021 · 3 years ago
  The requirement for identity verification on centralized exchanges is primarily driven by regulatory compliance. Governments and financial institutions have been increasing their scrutiny on cryptocurrencies due to concerns over illicit activities, such as money laundering and terrorist financing. By implementing identity verification, exchanges can demonstrate their commitment to regulatory compliance and reduce the risk of legal and reputational issues.
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• Nov 28, 2021 · 3 years ago
  At BYDFi, a decentralized exchange, we understand the importance of identity verification in the world of cryptocurrencies. While decentralized exchanges offer more privacy and anonymity, centralized exchanges often require identity verification to comply with regulatory requirements. This helps to ensure a safer trading environment and protect users from potential scams or illegal activities. However, it's worth noting that not all centralized exchanges have the same level of identity verification requirements, and some may offer different tiers of verification based on the user's trading volume or withdrawal limits.
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• Nov 28, 2021 · 3 years ago
  Identity verification is necessary for centralized exchanges to establish trust and security. With the increasing popularity of cryptocurrencies, exchanges have become attractive targets for hackers and scammers. By implementing identity verification, exchanges can verify the authenticity of user accounts and reduce the risk of unauthorized access or fraudulent activities. While it may inconvenience some users, it ultimately helps to create a safer and more reliable trading environment.
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