P.A.ID Strategies, a provider of market intelligence and custom research to companies and organizations, has recently published a report on KYC practices used by major cryptocurrency exchanges.
Notably, the report focused on 25 prominent crypto exchanges in Europe and North America. The analysts discovered that two thirds of these exchanges fail to ensure the implementation of proper KYC (know-your-customer) practices. 68% of the exchanges allow its users to trade crypto and fiat without conducting formal identification procedures.
Coinbase, Gemini and Poloniex were assigned the highest rank, with ID verification scores of 9/10, in the report titled “The Cryptocurrency Identity Crisis: An Industry Scorecard for Digital ID Verification for KYC and AML”.
John Devlin, principal analyst at P.A.ID Strategies, said: “Cryptocurrency wallets and exchanges want to enjoy the same trust as the wider traditional financial services, but for this to happen they need to rise above the sometimes-dubious reputation of cryptocurrency’s past and be seen as ‘model citizens’ of the economy.”
Newly emerging cryptocurrency exchanges and trading platforms are trying to adopt a more responsible approach in an attempt to improve the industry reputation and gain trust of customers and regulators.
For instance, Covesting, a fintech startup launched by former Saxo Bank traders, has announced that its goal is to create products and services fully compliant with regulatory standards. Dmitrij Pruglo, CEO of Covesting, said: “We have already made the beta version of our platform available to the public and will be very soon launching the official version. The only thing we are waiting for is to obtain a DLT License from Gibraltar’s GFSC to operate on a fully legitimate basis, and KYC procedures will be mandatory for all our clients. This is a must for all players of the crypto industry, if we want to show the market we are serious about the business.”