Crypto, perhaps rebranded as the more respectable-sounding web3, steers ever closer toward mainstream integration. Is it given that Certain tenets that have always been central to the crypto space may start to be edged out as they are incompatible with traditional and legally compliant operating methods?
Regarding financial operations and anti-money laundering requirements, know-your-customer (KYC) protocols are a regulatory expectation. Yet, up to now, crypto has operated in a gray area, or at least an inconsistent one, with different platforms and services employing systems that are not always aligned.
However, the direction of movement, particularly for centralized exchanges, appears only to be in one direction, towards a greater emphasis on unavoidable KYC procedures for customers, as evidenced recently by changes taking place at the trading exchange, Bybit.
What’s Happening at Bybit?
A recent announcement from the major crypto exchange detailed its plans to enforce mandatory KYC on all users to access its products and services. This new arrangement will start today and affect both new and existing customers.
Notably, the first two reasons given by Bybit for enforcing this change are “security and compliance” and “prevent illegal activities.” In addition, there are reasons given that relate to improving the user experience, including “enhanced services,” “exclusive offers,” and “convenience and security.”
Notably, Bybit is taking an overall approach in which KYC must use any aspect of its platform, which is not the case with all its competitors.
Trading Without KYC
After Bybit has changed its approach, there will still be some well-known platforms that allow some of their trading services to be accessed without KYC completion, including OKX and KuCoin, both of which allow non-KYC cryptocurrency withdrawals.
Crypto ATMs and peer-to-peer trades are also still options. However, ATM installation has stalled. Earlier this year, the longstanding platform LocalBitcoins, which acted as a means for buyers and sellers to find one another, closed down due to a lack of market demand for its services after more than ten years in operation. This closure, coming at the same time as crypto regulation such as the EU’s MiCA comes into view, arguably marks the end of a crypto era as the entire ecosystem shifts in from the fringes.
Chart from Coin ATM Radar
That said, decentralized exchanges such as Uniswap and Sushi remain faithful to the spirit of the…
