- KuCoin CEO, Johnny Lyu, champions the introduction of mandatory Know Your Customer (KYC) checks, reinforcing the role of KYC as an essential safeguard for user assets.
- Asserting that the principal value of Bitcoin is as a currency unit, Lyu disputes the widely held view that privacy is the most crucial aspect of Bitcoin, instead prioritizing secure user asset management.
As the global landscape of cryptocurrency continuously evolves, KuCoin, a leading crypto exchange, is set to implement mandatory Know Your Customer (KYC) protocols. CEO Johnny Lyu firmly believes in the essentiality of KYC in ensuring user asset security, challenging the conventional wisdom that privacy is the primary feature of Bitcoin.
Privacy Versus Security: A New Perspective
“When it comes to the purpose of Bitcoin creation, I think privacy is just one of its features,”
Lyu expressed in a recent interview with Cointelegraph on July 4th. He proposed an alternative narrative to the commonly held belief about Bitcoin’s central attribute, instead asserting that the cryptocurrency’s fundamental benefit lies in its use as an exchange unit.
Lyu elaborated that Bitcoin’s inception following the 2008 financial crisis, sparked by the United States subprime mortgage debacle, was fundamentally to offer a buffer against recessions. Thus, in his view, Bitcoin’s main purpose is not privacy, but a means of economic safeguarding.
Embracing KYC: KuCoin’s Approach to Enhanced Security
Although critics argue stringent KYC practices infringe on user privacy, Lyu firmly believes these policies ultimately benefit users by reinforcing their fund security. He describes KYC as a dual-layered protective mechanism.
“The first level is ownership, so you know that the money is yours. And the second level is that you can actually track your assets in the case of theft.”
As the cryptocurrency industry increasingly intersects with the physical world, compliance becomes increasingly paramount.
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“So in essence, in the whole development cycle of crypto, I would say that KYC, it is a stage that is inevitable, and it is very healthy as well,”
Starting July 15, 2023, KuCoin will roll out compulsory KYC checks for all new users, an announcement made in late June. While existing non-KYC users can continue to trade, they will be restricted from depositing new funds. Despite the probability of these new KYC rules impacting the platform’s trading volumes, Lyu remains optimistic, noting,
“in the long run, more compliant funds and users will enter this industry in the future, which is equivalent to opening the door for everyone better and making users more secure.”
According to recent statistics, KuCoin hosts a significant user base of 27 million, marking a 35% increase from the previous year. The platform also experienced a rise in trading volumes following the KYC upgrade announcement, moving from around $540 million to over $660 million at the time of writing.
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