Gracy Chen, Managing Director at crypto exchange Bitget, has indicated that crypto know-your-customer (KYC) measures are expected to become increasingly stringent in the near future.
Speaking in an interview with crypto news outlet The Block published on Monday, Chen suggested that crypto exchange users soon may be required to undergo ID verification procedures multiple times a year, with the possibility of incorporating biometric data into KYC processes.
“The incorporation of biometric data into KYC processes also appears to be gaining traction. While opinions on this matter may vary, it will notably complicate the activities of fraudulent individuals,” she told The Block about the issue.
Biometric data for ID verification purposes usually includes things like facial recognition, fingerprints, or iris scans.
Bitget joins industry in mandating KYC
Bitget, a crypto derivatives exchange and copy trading platform, recently implemented mandatory KYC requirements for all of its users.
This move aligns with a trend in the crypto industry, with other exchanges such as KuCoin and Bybit also introducing mandatory KYC procedures earlier this year.
In the interview, Chen emphasized the importance of KYC measures in building trust and protecting users against fraud and money laundering.
She stated that these measures demonstrate a commitment to transparency and compliance with anti-money laundering (AML) and KYC regulations, which regulators around the world see as crucial for the crypto industry to comply with.
Bitget could in the past be used with smaller amounts without having to undergo full KYC, but those days are now gone according to Chen.
“[…] we have now transitioned to a model where full KYC is mandatory for access to all exchange services,” Chen was quoted as saying.
New tools to combat crypto crimes
The recent shift towards mandatory KYC for all exchange services reflects the industry’s broader efforts to enhance regulatory compliance and user protection.
Chen also acknowledged the need for more effective solutions beyond KYC in combating financial crimes, emphasizing the importance of innovative technologies like Artificial Intelligence (AI) and machine learning.
“[AI] holds the potential to bring about a substantial transformation in AML capabilities,” she said.
Despite the drive towards stricter KYC measures, Chen also highlighted the need to balance security and privacy, particularly concerning personal data leaks.
“There are entire hacking groups dedicated to hunting for personal data,” Chen said, before finally reassuring users that Bitget’s user data “is stored with the same level of security as cryptocurrencies.”