Why Is KYC Important For Crypto Exchanges And Why Does Binance Take KYC Seriously?
Recently, Binance, one of the biggest centralized exchanges, made it mandatory for users of its platform to verify their accounts by meeting KYC requirements. This comes as the exchange seeks the approval stamp of regulatory agencies around the globe. The question now is, why does Binance suddenly take KYC seriously? We will get to that soon but firstly, let me briefly explain what KYC is.
What Is KYC?
Before we dissect this move by Binance, you have to understand what KYC means and why it’s gradually becoming a thing among crypto exchanges.
KYC (Know Your Customer) entails verifying the identity of users of a platform, assessing their suitability for the usage of the platform’s products and services. The KYC process relies on information contained in government-issued documents that can verify the identity of a user.
Previously, Binance never made KYC mandatory on opening a new account, but that has changed as the company attempts to bolster its standing in the eyes of regulators.
What Are The Benefits Of KYC? Binance As A Case Study
On Binance, there are perks available to users that complete the KYC process. Not sure what these perks are? Here are some of the many advantages of verifying your Binance account:
Lower Fees
The now-defunct Binance basic account registration — that had no KYC requirements attached — was a trader’s nightmare. Trading fees were unattractive to users, even when subsided by your BNB holding. KYC compliant upgrades such as the Intermediate Verified come with lower fees.
For intermediate verified accounts, the spot trading fee is about 0.075% of the traded asset. This is smaller than the 0.1% spot trading fee seen on basic accounts.
Larger Withdrawal Limit
Another benefit of completing the KYC requirements on Binance is the increase in withdrawal limit. By verifying your account, your withdrawal limit goes up to 100 BTC worth of assets daily.
Fiat Limit
Completing the KYC requirements also provides users access to fiat payments. The exact fiat limit depends on your level of the KYC requirements met. For the intermediate verified account, a $50,000 daily fiat limit is obtainable. Proceeding to the verified plus account gets you a $200,000 fiat limit.
Access To P2P
Unverified users can’t access the Binance peer-to-peer service until they have passed the KYC requirements. Once done, you can trade certain cryptocurrencies for fiat and vice versa through the P2P service.
Free Binance Savings Voucher
To encourage unverified users to complete the KYC process, Binance is offering a BUSD savings voucher. Unverified users can only redeem the voucher once they have verified their account through the completion of the KYC verification process.
How To Complete The Intermediate KYC On Binance
At the moment, Binance has made it compulsory to complete the intermediate KYC process before you can use its products and services. Unverified users have to upgrade their account to the Intermediate Verified tier by completing the relevant KYC requirement or risk losing their account.
Wondering how to complete the intermediate KYC process? Here’s a breakdown of the entire process:
Provide Your Personal Information
The Binance intermediate KYC process starts with completing the personal information form. Here, you have to submit your data, such as date of birth, name, and a host of others which matters user’s provided legal documents. Therefore, the information you provide must be accurate.
Submission Of Government-Issued ID
After providing your personal information, some proof is needed to confirm the accuracy of the information submitted. This is where a government-issued ID is required. You have to submit a government-issued ID such as your international passport, driver’s license, or similar. Any of these documents should suffice in authenticating the personal information you provided earlier.
The government-issued ID should have a recent picture of you. It will help you complete the KYC process seamlessly.
Facial Recognition
To confirm your identity, facial recognition is required. Start the facial recognition process, then have your face captured on your phone’s camera or laptop webcam, following all the prompts. If done correctly, your account should get verified within minutes.
What Are Some Identifying Documents Required During The KYC Process?
Government-issued IDs are the documents you need to complete the KYC process. Depending on your country of residence, this might be your international passport, social security card, driver’s license, residence permit, or similar.
Why Does Binance Take KYC Seriously?
Binance wants to do things by the book, and the KYC requirement is a step in that direction. One of the reasons why Binance has had issues with regulatory agencies in several countries is its KYC compliance. A handful of these government agencies have repeatedly faulted the platform’s lack of a KYC standard for all users. Now, the cryptocurrency exchange is taking steps to address that.
Conclusion
Besides the regulatory compliance angle, there’s the service delivery aspect. Knowing your customer helps in identifying the best way to provide the quality service desired. That’s why Binance is doing everything to make this a smooth process.