Study Reveals Majority of Crypto Exchanges’ KYC Compliance is Weak, Wild West Comparison
Most Cryptocurrency Providers Around The World Not Know Your Customer Compliant, or Weak User Gateways
As virtual currencies keep expanding, there are more and more companies that are starting to offer cryptocurrency-related services to the community.
But according to a research conducted by P.A.ID Strategies, 68 percent of companies in the European Union (EU), and the United States (US) only ask for an email address and a telephone number.
Crypto Providers Not KYC Compliant
At the moment, just 32 percent of the crypto exchanges in the EU and the US conduct a compliant Know-your-Customer (KYC) process. The study was commissioned by Mitek, a company that sells identity verification technology and operates in different countries in the world.
Regulatory agencies have been increasing regulations over crypto exchanges and other services providers, but some of them are not being compliant. The main intention behind these KYC rules is to avoid criminals operating in the market, reduce illegal activities and reduce tax avoidance. For example, KYC procedures are mandatory for all banks in the US and the EU.
Cryptocurrencies work in different way because they are anonymous and allow criminals to get financed. Additionally, individuals may be avoiding taxes by not declaring their possessions.
The study conducted checked 25 different companies in the two jurisdictions and discovered that just 32% is compliant.
Only four exchanges were able to have an ID verification score equal to 9/10 including Coinbase, Gemini, Poloniex and itBit. Luno and Bonpay had 8/10, Mercantox, Kraken, Bitstamp and CoinCorner 7/10, QuadrigaCX, Cex.IO, Blockchain Wallet, Wirex, and Likke Wallet obtained 6/10.
In the future these services providers will have to provide better KYC information to regulatory agencies in the United States and the European Union if they want to keep operating.