KYC (Know Your Customer)
Regulatory requirements that oblige financial institutions and exchanges to verify their customers' identity before providing services, to prevent fraud and money laundering.
Also known as: Know Your Customer, identity verification
Last reviewed: 1 June 2026
Know Your Customer (KYC) is a set of due-diligence processes required by financial regulations in most countries. Banks, brokers, crypto exchanges, and other regulated entities must verify who their customers are — collecting and checking identity documents, proof of address, and sometimes source-of-funds information — before allowing them to open accounts or make significant transactions.
KYC serves as a gatekeeper against anonymous financial activity, making it harder for fraudsters, money launderers, and sanctions evaders to use the regulated financial system. In practice, fraudsters circumvent KYC by using stolen identities, money mules, or by operating through lightly regulated or offshore platforms that apply minimal checks.
For consumers, KYC is why legitimate financial services ask for your passport and a utility bill. Scam platforms — fake crypto exchanges, boiler-room investment firms — often impose fake 'KYC fees' as a pretext to extract more money from victims.