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What does KYC mean?
KYC (know your customer) is the process a financial company uses to identify and verify who its customers are, usually with a government ID and personal details. In the US it is part of the customer due diligence rules that also ask firms to understand what an account is for and monitor it.
What it means for you
Buying crypto for dollars at a regulated company usually means handing over ID first, and the account can be held or frozen until the checks finish. Your trades there are linked to your identity, which matters for tax records. A site that asks for ID and a deposit through an unsolicited link is a common scam shape, so reach the company directly.
How it works
In the US, KYC sits inside anti-money laundering rules. FinCEN's customer due diligence rule asks covered institutions to identify and verify customers, identify the people who own or control company accounts (anyone with 25% or more), understand what each relationship is for, and monitor accounts to report suspicious activity. For banks, the identification rule sets a minimum: name, date of birth, address and an identification number, verified with documents or other methods, checked against government terrorist lists and kept for five years after an account closes. Crypto platforms operating as money services businesses carry anti-money laundering duties too.
Sources: FinCEN: CDD Final Rule, Federal Reserve: 31 CFR 1020.220, Customer identification program requirements for banks, FINRA: Crypto Assets · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.