What is KYC, and why do crypto exchanges require it?

Hello dear friends. Today, I would like to give information with the KYC correcting we have encountered in the stock exchanges in accordance with my knowledge and research.
KYC is a abbreviation that means diagnosis the customer. KYC is a series of rules implemented by financial institutions to verify the identity of its customers and prevent illegal activities. KYC is mandatory for banks, insurance companies, credit card companies and other financial service providers.
Crypto changes are online platforms that buy and sell crypto currencies. In many countries where crypto currencies are legally and regulated, crypto changes must comply with the requirements of KYC. KYC helps to confirm the identity of its users, to detect criminal activities such as money laundering, terrorist financing, tax evasion, and ensure legal compliance.

KYC is both an advantage and disadvantage for crypto changes. The advantages are:
1️⃣ KYC increases the reliability and reputation of crypto changes. KYC allows crypto changes to establish good relations with regulatory institutions and avoid legal problems.
2️⃣ KYC maintains the security and privacy of crypto changes, users. KYC helps to protect users against cyber attacks such as identity theft, fake accounts, fraud, ransom software.
3️⃣ KYC allows crypto changes to better understand the needs and preferences of its users and to serve them better. KYC allows crypto changes to analyze users' process behaviors, risk profiles, customer satisfaction and offer them personalized products and offers.

The disadvantages are as follows:

1️⃣ KYC asks users to share their personal information. This may violate users' privacy rights and increase the risk of leaking or abuse of personal data.
2️⃣ KYC slows down the processing processes of crypto changes and increases costs. KYC requires crypto changes to perform additional operations such as verification of identity documents, performing background checks, and preparing reports. This may reduce users' speed and ease and reduce the operational efficiency of crypto changes.
3️⃣ KYC may cause crypto changes to lose its users. KYC restricts crypto changes, anonymity and autonomy of its users. This may cause some users to move away from crypto changes or turn to alternative platforms that do not apply KYC, as it is contrary to the basic philosophy of crypto currencies.
KYC is an issue that offers both opportunities and difficulties for crypto changes. KYC plays an important role in the legalization and spread of crypto changes, crypto currencies. While KYC helps to provide a safe, legal and quality service to its users, crypto changes should also try to meet the expectations of users' privacy, speed and anonymity.
I hope this information has been useful ..😊😊