What is KYC (Know Your Customer)?

KYC, or "Know Your Customer," refers to regulatory requirements that compel financial institutions, including Bitcoin exchanges, to verify their customers' identities. This process often involves collecting personal data, such as ID documents or proof of address, to prevent illicit activities like money laundering. As Bitcoin gains mainstream traction, most renowned exchanges adhere to KYC as part of legal compliance, linking personal identities to Bitcoin addresses. However, this has raised concerns: while KYC protects against illegal transactions, it poses risks, including potential identity theft, privacy breaches from exchange hacks, and transaction censorship. Non-KYC exchanges offer an alternative for those prioritizing anonymity.