KuCoin Exchange is set to implement mandatory Know Your Customer (KYC) checks, and its CEO, Johnny Lyu, believes that privacy is not the most crucial aspect of Bitcoin. In an interview with Cointelegraph on July 4, Lyu stated that while privacy is one of Bitcoin's characteristics, the core benefit of the cryptocurrency lies in its function as a hedge against the risk of recession. Lyu emphasized that Bitcoin's creation was influenced by the 2008 financial crisis that resulted from the subprime mortgage crisis in the United States.
While strict KYC practices may be seen as a potential infringement on personal privacy, the KuCoin CEO believes that such measures are necessary to enhance the security of users' funds. According to Lyu, KYC serves the purpose of safeguarding public as sets by ensuring ownership and enabling the traceability of stolen assets. He emphasized the importance of being able to track the source of any lost assets to ensure their legitimacy.
Lyu also highlighted the increasing interaction between the cryptocurrency industry and the physical world, making compliance an essential aspect. He described KYC as an inevitable and healthy stage in the development cycle of cryptocurrencies, emphasizing the need for regulation and overview.
KuCoin announced in late June that starting from July 15, 2023, all new users would be subject to mandatory KYC checks. While existing non-KYC users can continue trading, depositing new funds will be limited. Lyu acknowledged that stricter rules may cause some clients to leave in the short term, but he remained optimistic about the long-term prospects of compliance. He believes that increased compliance will attract more secure funds and users to the industry, providing better security for everyone involved.
According to KuCoin, the platform currently boasts 27 million users, representing a 35 percent increase compared to the previous year. Following the announcement of the KYC upgrade, the trading volume on KuCoin experienced a surge from approximately $540 million to over $660 million at the time of writing, according to data from CoinGecko.
