Decentralized crypto exchanges are all about anonymity and that’s where IDEX becomes an exception. Some of the features that lure traders towards decentralized exchanges include privacy, custody and the privilege of gaining access to desirable tokens before they make it to a major exchange platform. The world’s most popular decentralized exchange, IDEX becomes an exception by transitioning to a full verification model.
Cryptocurrencies such as Bitcoin have somewhere facilitated the growth of “darknet” online marketplaces, by providing an anonymous and digital payment mechanism, in which illegal services and goods are traded. However, in recent months, the raft of government regulations that have sprung, have led to the adherence to stringent AML and KYC laws on centralized exchanges. Nowadays, almost every centralized exchange is making AML and KYC guidelines compulsory for it users.
Crypto exchange IDEX has made it to the headlines by introducing KYC requirements. Had it been a centralized exchange, IDEX would not have garnered the same kind of attention. The cryptocurrency community will be closely monitoring the exchange’s decision to see if it is an isolated case or the shape of things to come. Since IDEX captures around 7x the trading volume of its nearest competitor, it definitely exerts significant influence, owing to its dominant position within the decentralized exchange (DEX) market.
Users don’t need any personal ID verification in case of DEX platforms. However, it is important that cryptocurrency innovators keep in mind the needs of the society in general, and consumers in particular. Thus they must ensure legal compliance in order to ensure trust and safety online and also protect the community, as reported on The Medium.
Crypto exchange IDEX explained its transition to a full KYC model stating that decentralization exists on a spectrum. Unless the application or system lacks any centralized parts, it can be subject to regulation. IDEX will be implementing AML/KYC policies apart from blocking IP addresses in order to comply with money laundering laws and sanctions. The number of active users and trading volume has sharply dropped ever since the exchange announced its new KYC policy. However, it is too early to conclusively link the two events, as reported on Bitcoin News.
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