Privacy is not the most important feature of Bitcoin. This is the view of KuCoin CEO Johnny Lyu, expressed in an interview Cointelegraph.
“If we talk about the purpose of Bitcoin’s creation, I think privacy is only one of its options,” he said.
According to Lyu, the main advantage of digital gold is its role as a medium of exchange that allows holders to hedge against economic recession risks.
The KuCoin CEO reminded that the cryptocurrency was created after the global financial crisis of 2008, triggered by the collapse of the U.S. subprime mortgage market.
These events led to the birth of Bitcoin, he emphasised.
In June KuCoin announced new user verification rules. The head of the exchange noted that KYC procedures bring more benefits to users than threaten their privacy. In his words, such a policy provides two-tier protection of assets.
“The first level is ownership, when you know for sure that this money is yours. The second is that you can trace assets in case of theft. If you lose your funds, we will be able to determine the source,” said Lyu.
The crypto industry will be compelled to adopt compliance practices as its interaction with the real world expands, he believes.
“So basically, for the entire development cycle of cryptocurrencies I would say that KYC is a stage that is inevitable, and it is also very useful,” the head of KuCoin expressed with confidence.
He suggested that the platform would lose some users due to tightening verification rules; however, this impact will be short-term, Lyu believes.
“In the long term, more funds and participants that adhere to regulatory rules will enter the industry, which is equivalent to opening doors for all and increasing user safety,” concluded the exchange’s CEO.
According to KuCoin, the platform’s client base stands at 27 million accounts. The figure is up 35% year on year.
In August 2021, Binance, the world’s largest cryptocurrency exchange, introduced mandatory verification for users. A year later, the company admitted that due to the implementation of KYC procedures it lost “about 90% of customers and billions of dollars in revenue.”