KYC Identification Protocols and Crypto Exchanges

Blockchain analysis firm CipherTree released a report and this report included many interesting details. According to the report, more than half of all crypto exchanges worldwide have weak know your customer (KYC) identification protocols.

It is worth noting that, exchanges in Europe and the U.S. are among the worst offenders. Interestingly, the blockchain analysis firm analyzed more than 800 decentralized, centralized, as well as automated market maker exchanges. Unfortunately, 56% of them did not follow KYC guidelines at all despite anti-money laundering (AML) regulations.

Based on the information taken from the report, the highest number of crypto exchanges are in Europe. Interestingly, Europe is famous for its regulations. Moreover, 60% of European Virtual Asset Services Providers have deficient KYC guidelines.

Let’s have a look at the countries with the biggest number of offenders. The U.S., U.K., as well as Russia, are the three countries that have the highest number of exchanges with weak KYC. Notably, Singapore is also at the top of the pack when it comes to the combined number of weak and porous VASPs.

Crypto exchanges around the world

As stated above, the report released by the blockchain analysis firm CipherTree is full of interesting details. For example, many crypto exchanges do not bother to mention the country of origin on their website or terms and conditions.

Importantly, this appears to be deliberate as 85% of such exchanges, possessed a frail KYC framework. This indicates that some exchanges are hiding their jurisdictions as they do not want to register or comply with AML regulations.

According to the report, 70% of exchanges registered in Seychelles have poor KYC norms. Authorities must pay attention to this problem, as criminal groups may use poor KYC norms to cover their illegal activities.

As can be seen from the report, more than half of all crypto exchanges, KYC identification protocols. So, authorities should join forces to learn more about the crypto industry.