In a recent interview, KuCoin CEO Johnny Lyu discussed the significance of Know Your Customer (KYC) measures in protecting user funds and recovering assets in the event of theft or hacking. Lyu emphasized that while privacy is considered a feature of Bitcoin, it is not the core purpose of its creation. Instead, he highlighted Bitcoin’s role as a unit of exchange, particularly in hedging against economic recessions.
Lyu pointed out that Bitcoin’s origins can be traced back to the 2008 financial crisis and the subsequent subprime mortgage crisis in the United States. He argued that Bitcoin was born as a response to these events, solidifying its position as an alternative form of currency for individuals seeking protection during economic downturns.
Despite concerns about restricting user privacy, the KuCoin CEO stressed that strict KYC practices are essential for enhancing the security of users’ assets. By implementing KYC procedures, exchanges can ensure the rightful ownership of funds and enable tracking in case of theft, providing users with greater peace of mind.
Lyu also acknowledged the growing interaction between the cryptocurrency industry and the physical world, emphasizing the need for regulatory compliance. He stated that KYC is an inevitable stage in the development cycle of cryptocurrencies and a healthy step toward establishing a more secure environment.
KuCoin’s Mandatory KYC Checks
KuCoin recently made headlines by announcing the introduction of mandatory KYC checks for all new users starting from July 15, 2023. Although this move may impact the platform’s trading volumes in the short term, the CEO remains optimistic about the long-term benefits of compliance. Lyu anticipates that increased compliance will attract more funds and users to the industry, ultimately bolstering security and fostering user confidence.
With 27 million users presently, a 35% increase from the previous year, KuCoin is actively positioning itself as a secure and regulated exchange. Following the announcement of the KYC upgrade, the platform experienced a notable surge in trading volumes, reflecting growing confidence in its commitment to compliance.
As the cryptocurrency landscape evolves, it is becoming increasingly important for exchanges to prioritize regulatory adherence and user protection. KuCoin’s emphasis on KYC measures highlights the industry’s recognition of the necessity for security and establishes a precedent for other exchanges to follow suit.