KYC
ComplianceKnow Your Customer (KYC) is the identity-verification process financial institutions and crypto exchanges must complete before letting a customer open an account or transact.
KYC requires collecting and verifying identifying information — typically a government ID, proof of address, and sometimes a biometric check — before onboarding a customer. Crypto exchanges are subject to it because the Financial Action Task Force (FATF) classifies them as Virtual Asset Service Providers (VASPs) under Recommendation 15, giving them the same AML/CFT duties as banks. In the US, FinCEN treats most exchanges as money services businesses, triggering Bank Secrecy Act identification and due-diligence requirements.
KYC is not a one-time gate. Compliant platforms screen customers on an ongoing basis against sanctions and politically-exposed-person lists and monitor transactions for anomalies, applying heavier scrutiny to higher-risk customers — a "risk-based approach."
For crypto, KYC is the practical entry point: you generally cannot convert fiat into an asset, or withdraw back to a bank, without first passing an exchange's or custodian's KYC checks.
Crypto Relevance
For ISO 20022-aligned coins used in institutional settlement, KYC at the regulated on/off-ramp is the gate that must clear before fiat can move into or out of the asset — which is why their adoption tracks closely with exchange compliance.
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Join ISO 20022 investorsRelated Terms
AML
Anti-Money Laundering (AML) is the broader framework of laws and procedures — of which KYC is one part — that prevents criminal proceeds from being disguised as legitimate funds.
FATF Travel Rule
The FATF Travel Rule requires that originator and beneficiary information must travel with crypto transfers above $1,000, structured in ISO 20022-compatible format.
LEI
LEI (Legal Entity Identifier) is the 20-character ISO 17442 code that uniquely identifies legal entities in financial transactions, mandatory in most ISO 20022 messages.
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Last reviewed: 2026-07-01