Recent research examining 25 of the world’s crypto exchanges has shown that 68% of crypto exchanges are failing to comply with “Know Your Customer” (KYC) policies. Non-compliant companies have a lot of work to do as new anti-money laundering regulations will come into force next year.
According to the results of a recent study performed by the analytics house P.A.I.D Strategies, 32% of digital currency exchanges are out of the appropriate KYC verification, with 25 exchanges being checked. That means people can trade on such fintech platforms with no need to provide any identification or to go through a careful KYC examination. Basically, they can trade with revealing only their telephone number and email address, which are easy to get without showing an ID.
Nevertheless, the situation on the crypto market will change soon due to new policy accepted by the European Parliament’s Committee on Economic and Monetary Affairs in December last year. The authority agreed to set new rules requiring crypto exchanges and digital wallets providers to ask their clients for identification. The financial technology regulation will come into effect starting June 2019.
Thus, if crypto trading platforms want to have the same level of trust as traditional fiat currency, they need to obey the same set of standards. Unfortunately, more than half of virtual coins exchanges are currently failing to comply with them.