What is KYC (Know Your Customer)?

Why does an exchange ask for your ID before it lets you use your account?

Think of opening a bank account: the business has to know who it’s serving. KYC, short for Know Your Customer, works the same way in crypto. You usually provide personal details and an identity document, and you may need a photo or video to confirm that you’re the document’s holder.

Identity verification is part of a broader check called customer due diligence. Depending on the risk, the provider may ask for proof of address, tax residence, occupation or information on the source of funds. The checks can continue for as long as you keep the account.

Why it matters

If you open an account on an exchange subject to these obligations, KYC affects your access to its services. If the required checks aren’t completed, the provider may restrict or refuse service. It may also ask you to update your details later.

Simply holding crypto doesn’t create a general obligation to register in some KYC database. The duty to carry out checks falls mainly on businesses covered by the relevant framework. Also, a small transaction amount doesn’t automatically entitle you to an anonymous account.

What to watch out for

We think it’s crucial to separate identity verification from a platform’s security: the fact that it asks for KYC doesn’t prove it’s legitimate or trustworthy. Check its official web address and its licensing before you upload personal documents.

KYC never requires your seed phrase or private key. These give control over your crypto; they don’t verify your identity. Avoid “verification” links that arrive in unexpected messages.

In Greece

The main framework is Law 4557/2018, as amended, with Articles 12–13 covering customer due diligence. MiCA deals with the crypto-asset market and providers, but it isn’t by itself the main source of identity verification obligations.

If you transfer euros from an exchange to a Greek bank, the bank may separately ask for information on the source of funds. Keep a history of your transactions and the related documents. Completing KYC doesn’t replace a tax return, nor does it determine whether tax is owed. Requirements vary from case to case.