Safeguarding User Funds: KuCoin CEO Johnny Lyu Explores the Game-Changing Power of KYC
“KYC is a crucial measure for crypto exchanges, ensuring the protection and recovery of user funds in cases of theft or hacking,” emphasized KuCoin CEO Johnny Lyu. As KuCoin gears up to implement mandatory Know Your Customer (KYC) checks, Lyu highlighted that privacy is not the paramount feature of Bitcoin.
In an interview on July 4, Lyu stated, “When considering the purpose of Bitcoin’s creation, privacy is merely one of its features.” He emphasized that the core advantage of Bitcoin lies in its function as a unit of exchange, enabling holders to hedge against recessions. Lyu traced Bitcoin’s genesis back to the 2008 financial crisis, which originated from the United States subprime mortgage crisis. He noted, “These events paved the way for the birth of Bitcoin.”
While some may argue that stringent KYC practices compromise users’ privacy, the KuCoin CEO firmly believes that such policies enhance the security of users’ funds. He explained, “KYC aims to safeguard the public’s assets and ensures asset protection on two levels.” Lyu elaborated further, stating, “The first level is ownership, guaranteeing that the money belongs to you. The second level is the ability to trace your assets in case of theft. Thus, if your assets are lost, we can track the source and ensure its legitimacy.”
The cryptocurrency industry is increasingly interacting with the physical world, making compliance imperative, according to Lyu. He added, “Therefore, throughout the entire development cycle of crypto, KYC is an inevitable and highly beneficial stage.”
KuCoin officially announced in late June that starting from July 15, 2023, mandatory KYC checks would be introduced for all new users on its platform. Users who fail to complete the KYC process will be unable to access KuCoin’s products and services. Existing non-KYC users will still have trading capabilities but will be restricted from depositing new funds.
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Lyu acknowledged that the new KYC restrictions may temporarily impact KuCoin’s trading volumes. However, he affirmed the long-term optimism regarding compliance in crypto exchanges, stating, “Over time, more compliant funds and users will enter the industry, ultimately improving security and inclusivity for all.”
As per KuCoin’s data, the platform currently boasts 27 million users, a 35% increase compared to the previous year. Following the KYC upgrade announcement, trading volumes on KuCoin surged from around $540 million to over $660 million at the time of writing, as reported by CoinGecko.