What does KYC stand for and why is it so hard to create a crypto account?

Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.

If you’ve ever signed up for a crypto account with one of the big exchanges you will have noticed: The process was really hard – all kinds of questions asked, some you probably didn’t even know the answer to. Maybe you even gave up and said: “Too complicated, what do they want from me!”

We are here to tell you, those companies don’t actually WANT you to do this. They HAVE to make you do it. But why?

The requirements are different in different countries, but at the core of it is a requirement known as KYC - short for “know your customer”. Governments actually require that companies make sure to verify who you are.

There are a few reasons, but governments want to make it harder for bad players to use crypto for bad things. Because once your money is in an anonymous wallet, it’ll be hard for them to tie it back to someone. Money laundry, tax evasion, financing terrorism - you name it. There are some really bad things money can do, and of course governments try to make them as hard as possible, rightfully so.

But now you know: Because a few bad people do a lot of very bad things, you have to suffer through a long signup process.

And next episode, we show how stablecoins can help you send money to friends and family in even the most remote of places.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.