3.5 KYC - Know Your Customer

KYC – Know Your Customer -Understanding Identity Checks Before Using Crypto Platforms

What you will understand after this chapter

Why UK regulated and registered crypto platforms must verify customers’ identities under anti‑money‑laundering and other regulations.

The typical three step KYC process (personal details, identity/address documents, selfie or live video).

Practical points that can reduce delays (matching details, clear images) and why information may be reported to tax and other authorities.

This chapter explains how KYC works in general. It is not a recommendation to open an account, trade, or invest in cryptoassets.

Why KYC is used

Before most firms will let you access full functionality (for example higher deposit or withdrawal limits), they must check who you are under UK anti money

laundering (AML), counter terrorist‑financing and related rules.

These checks are a regulatory requirement for many financial and crypto firms, not simply a preference of the app. In some cases, information collected as part of these checks may be shared with regulators or tax authorities in line with applicable laws and reporting obligations.

If KYC checks are incomplete or fail, firms may:

Keep account limits very low.

Restrict or block deposits, withdrawals or trading.

Decline to continue the business relationship.

Step 1: Providing basic personal details

When creating an account, firms will usually ask for:

Full legal name (as it appears on your identity document).

Date of birth.

Residential address and postcode.

Nationality and country (or countries) of tax residence.

Over time, additional identifiers (such as National Insurance number or other tax IDs) may be requested to meet evolving reporting requirements and to help match records accurately.

To reduce mismatches and delays, make sure:

You enter details exactly as shown on your documents.

Spellings and formats (for example middle names) are consistent.

Step 2: Submitting identity and address documents

You will then be asked to provide evidence to support the information given. Commonly requested items include:

A government issued photo ID (for example a passport or photo driving licence).

In some cases, a recent document showing your address (for example a bank statement or utility bill in your name).

General good practice:

Use original documents rather than photocopies.

Ensure the full document is visible, in focus and not obscured.

Check that names, dates and addresses are readable before submitting.

Poor quality images or mismatched details are common reasons for delays or requests for resubmission.

Step 3: Face verification or live video

Many firms now add a facial‑recognition or live video step to confirm that the person opening the account matches the photo ID.

To complete this more smoothly:

Use good lighting and follow on‑screen instructions.

Remove hats, sunglasses or similar items if asked.

Repeat the step if the app reports that the image is unclear.

Once these steps are completed, your application is submitted for review.

What happens after you submit

Review times can vary: some checks are automated and complete quickly; others may take longer if manual review is needed or if information is incomplete or unclear.

In the UK, additional rules may apply to first‑time crypto investors (for example, cooling‑off periods before certain activities are allowed). These measures are intended to give new customers time to reflect on the risks before proceeding.

Firms will typically notify you by email or in

app once verification is complete and explain what you can and cannot do on the account.

Data use, transparency and your own records

Information collected for KYC and AML purposes can, in some circumstances, be shared with regulators, tax authorities or law‑enforcement agencies in line with legal obligations and cooperation frameworks.

It is sensible to:

Read the platform’s privacy and data‑use information before providing documents.

Keep your own records of account openings, funding, trades and withdrawals to help with any future tax or compliance reporting you may need to do.

Key points to remember

Identity checks are a standard requirement for many firms offering financial and crypto services to UK consumers.

They exist to help reduce financial crime and to meet regulatory expectations, but they do not remove the underlying risks of using or investing in cryptoassets.

Providing accurate, consistent information and clear documents can reduce delays, but you should only proceed if you are comfortable with how your data will be used.

Continuing through this guide should help you understand the broader framework around crypto use and regulation. It remains your decision whether to engage with crypto at all, and if you are unsure, you may wish to seek independent financial or legal advice.

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FCA Registered Cryptoasset Exchanges

Cryptoassets are high-risk and unregulated; verify on FCA register.