Know-your-customer (KYC) verification

Tl;dr: Coinbase adheres to local anti-money laundering regulations as part of our comprehensive financial compliance program. Local anti-money laundering laws require Coinbase to verify your identity before allowing you to have full use of our services. Coinbase does this through a know-your-customer (KYC) program and it is one of the first things you see when you sign up for a new account.

By Gary Shambat

Product

, November 16, 2022

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At Coinbase our mission is to increase economic freedom in the world, and we do so by trying to be the most trusted company in crypto. Trust is not an abstract notion, but a function of the real things we do to protect our users and the broader crypto community from harm. One of those things is adhering to local anti-money laundering regulations as part of our comprehensive financial compliance program. We do this to stop bad actors from accessing our platform so that financial crime does not have a chance to form. 

What this means for you, the user, is that local anti-money laundering laws require Coinbase to verify your identity before you’re allowed to have full use of our services, including trading, staking, and sending/receiving funds. We do this through a know-your-customer (KYC) program and it is one of the first things you see when you sign up for a new account. Over the course of several screens, we ask users to provide personal information so that we can properly verify that you are who you say you are. Depending on the country in which you live, you may see a slightly different mix of steps that include:

  • A screen to input your address, date of birth, and the last four of your SSN

  • A screen to capture the image of your personal ID card  

  • A screen to capture the image of your proof of address like a utility bill

  • Questions about how you plan to use Coinbase products

We collect this information to satisfy local anti-money laundering laws, which includes determining if you’re on any international sanctions lists.  We also have a sophisticated fraud detection engine that helps us measure risk which then makes a decision on whether you need to supply additional information in order to complete onboarding.  

We understand that submitting your personal information may make you hesitate and wonder if you want to complete your sign up. Rest assured, we comply with applicable digital privacy laws (see our privacy policy) and safely handle your personal information with the utmost care, encrypting the data in transit and at rest. We also understand if this process may feel to be more work than your typical digital app signup. However, just like applying for a traditional bank account requires more diligence, so too does opening up an account on a financial services platform such as Coinbase.   

We balance this necessary process with a friendly user experience that allows you to explore the product before opening an account. In the U.S. and many countries in Europe, for example, users have the opportunity to get a feel for the product interior first. When you’re ready to transact, you can initiate and complete KYC at that time.      

Recently, one of our international entities observed a large spike in new accounts originating from a single small nation. Our KYC platform was able to detect suspicious trends in the KYC information provided by users. Upon closer examination, we found that these accounts were linked to a fraud ring that could have abused not only our products, but other users in the crypto community. With the signals provided by our KYC platform, we were able to block this fraud ring and increase the safety of our ecosystem. 

Bringing it all back full circle, in our world we must balance ease of signup with the necessities of regulation and security. As you progress along your Coinbase journey, you may need to update or provide additional information, either through our periodic review program or in case you change certain personal fields in your account. We are thankful in advance for your diligence in providing accurate identity information – you are doing your part in keeping the crypto community resilient. Here are some help center links with further information on best practices while submitting your KYC information:

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We’re proud to lead the way in providing the best protections available to all of our 108+ million users. Trust is built on dependable security and protections — which is why we make protecting your account & your digital assets our number one priority. Our know-your-customer (KYC) program is one of the many ways that we do that. Learn more here.

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