Bybit, the world’s fifth-largest cryptocurrency derivatives exchange by trading volume, is planning to impose Know Your Customer rules.
The Singapore-based company posted several statements on introducing major KYC policies on its platform in order to “improve security compliance for all traders.”
A spokesperson for Bybit told Cointelegraph that Bybit will introduce KYC procedures starting from July 12 to help better protect user accounts and funds.
Individuals will have two KYC verification levels with Bitcoin withdrawals capped at 50 Bitcoin (BTC) and 100 BTC. In order to receive the KYC 1 level verification, users will be required to identity document and facial recognition, while KYC 2 level requires an additional proof of address, a Bybit spokesperson noted. Businesses have one KYC verification level with a 100 BTC limit.
A representative from Bybit said that the exchange is introducing KYC in anticipation of its spot exchange and a hot wallet launch in order to enable the "most secure experience" for users, adding:
"With these exciting new additions we expect to see a significant increase in trading volumes. As we expand our offerings beyond derivatives, we are delighted to be able to bring to spot trading the same level of quality service that users have come to associate with Bybit."
Some crypto enthusiasts subsequently suggested that Bybit’s new KYC policies would negatively impact the exchange’s trading volumes. “Bybit volume will dry up. Why would you kyc there? It’s actually not enough of a good exchange to even want to do that,” Tradeboi Carti noted on Twitter.
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Bybit has recently become the subject of increased scrutiny from global financial regulators. In mid-June, Canada’s Ontario Securities Commission announced it would be holding a hearing against Bybit regarding the crypto exchange’s alleged violations of Canadian securities law. Previously, the Japan Financial Services Agency warned that Bybit was not registered to operate crypto services in the country.
In March, Bybit suspended services for customers in the United Kingdom, following a blanket ban by the Financial Conduct Authority on retail crypto derivatives trading.