KYC
A compliance process where a crypto service verifies a customer’s identity before allowing certain account features or transactions.
KYC, short for Know Your Customer, is the identity-checking process used by many crypto exchanges, brokers, payment apps, and other regulated financial services. It typically asks users to provide personal information such as legal name, date of birth, address, and a government ID, and may include a selfie or proof of residence. The goal is to confirm that a customer is who they claim to be and to screen for risks such as fraud, sanctions violations, money laundering, or terrorist financing.
In crypto, KYC matters because it often determines what a user can do on a platform. For example, an exchange may let someone browse prices or deposit small amounts with limited checks, but require full KYC before allowing fiat withdrawals, higher trading limits, or access to certain products. KYC is different from using a self-custody wallet, where there may be no company verifying identity because the user controls the wallet directly.
Other terms in Regulation & Tax
AML
Anti-money laundering rules and processes aim to stop criminals from using financial systems, including crypto platforms, to hide or move illicit funds.
BitLicense
A state license required for many virtual currency businesses that serve customers in New York.
CARF
CARF is an OECD framework for tax reporting and automatic exchange of information about crypto-asset transactions.
Crypto Tax Loss Harvesting
A tax strategy where investors sell crypto at a loss to realize a capital loss that may offset taxable gains, subject to local rules.