Ethereum DEX (Decentralized Exchange) "IDEX" Implements Complete KYC (Know Your Customer) Process
IDEX Implements Full KYC
Following last month’s news that IDEX began excluding residents of New York as part of its compliance measures, IDEX plans to implement KYC/AML policies to comply with sanctions and anti-money laundering laws in addition to IP blocking.
When describing the transition to a full KYC model, IDEX wrote the following.
“Competition exists in the spectrum of decentralization, and as long as there is a central governing part in systems or applications, it is susceptible to regulation. Aurora (IDEX’s operator) is working toward building a fully decentralized financial system, but the path to get there requires significantly more control and centralization than the final state. In addition to IP blocking, IDEX plans to implement KYC/AML policies to comply with sanctions and anti-money laundering laws.”
“Over the coming months, IDEX will begin KYC procedures so that all users comply with both AML laws and sanctions-related laws. Similar to other exchanges, IDEX has tiers corresponding to the amount of funds users can move through the service. Those trading small amounts will be required to provide minimal information, while those wishing to trade larger sums will need to complete additional KYC steps.”
Centralized cryptocurrency exchanges like Coincheck and U.S. Bittrex are implementing KYC (know-your-customer) processes, providing services after registering personal information such as passports or driver’s licenses.
On the other hand, decentralized exchanges (DEX), which conceptually have no central administrator, generally do not implement KYC processes, especially in services that are considered the last frontier of privacy.
With the substantial attention surrounding IDEX’s decision, investors’ behavior will be closely watched. In the DEX market, IDEX has about seven times the trading volume of its nearest competitors, giving it significant influence.
