Know Your Customer (KYC)

What does Know Your Customer (KYC) mean?

Know Your Customer (KYC) means that an organization or governing body requests proof of identity before allowing an individual or company to conduct transactions with them. It’s a process by which organizations collect and verify the identities of their clients, and can help screen for potential criminal activity.

The process usually requires a user to provide an official, government-sanctioned document to confirm their identity. A few examples include driver’s licenses, passports and I.D. cards. To confirm that the person they're conducting business with is who they claim to be, regulations require financial institutions to collect customer data.

Why is KYC necessary?

Know Your Customer (KYC) laws and regulations are necessary to help banks, exchanges and other financial institutions comply with their legal obligations to prevent money laundering, fraud and other criminal activity.

It also creates a verification process so that institutions know who they’re doing business with, and whether or not those individuals can be trusted with their services.

What does the process involve?

The KYC process involves verifying individuals’ identities by cross-referencing their information against governmental watch lists, such as the U.S. Treasury’s Office of Foreign Assets Control (OFAC). This can be done through a number of technologies, including photo I.D. checks, fingerprinting and facial recognition.

The process will also ask for information about the individual’s identity, such as their name, date of birth, social security number or national identification card/number. In some cases, this will be a one-time process. In other cases, it may include a biometric check or a continuous review of the customer against watch lists and sanctions programs.

How does KYC impact crypto investors?

Typically, in order to trade cryptocurrencies on a centralized exchange, users have to complete a KYC protocol. In most cases, compliance is required for all investors over a certain level of net worth or income.

Regardless of their location or the country they’re operating in, these rules impact every cryptocurrency exchange worldwide. If you want to get thoroughly involved in the world of crypto, there’s a good chance you’ll need to submit KYC documentation to several exchanges, as the jurisdiction of each one is different.

KYC on Bybit

Bybit offers three KYC levels for individual users: Standard, Advanced, and Pro, as well as a separate Business KYC for corporate users.

The documents required for each level are as follow:

• Standard: Identity Assessment, Proof of Identity (POI)
• Advanced: Proof of Address (POA)
• Pro: Enhanced Due Diligence
• Business: The full list of documents are listed in here.

A minimum of Standard KYC is required to access all Bybit products and services, with higher KYC levels unlocking increased daily withdrawal limits.