What is KYC?

Why KYC matters

These duties bind banks, exchanges and payment institutions because they handle money transmission. Hosting is not a regulated financial activity, so a compute provider has no equivalent obligation in the jurisdictions where we operate. Hosts that demand a passport do so for chargeback and fraud control, not because a statute requires it — which is why crypto-settled providers, who cannot receive a chargeback, generally do not ask. The distinction matters practically: an identity document collected for fraud control is still an identity document that can be breached, sold, or produced in response to a demand years later.

KYC in practice

When you run a server, KYC means checking who your customer is before letting them in. In practice, you would look at a passport or utility bill, record the details, and re-check them periodically. If you are a financial institution, getting this wrong can mean fines or losing your licence. For a compute provider, the cost is less regulatory and more about trust: collect identity documents for fraud control, and you hold sensitive data that can be breached or demanded years later. Every piece of identity you store is a liability you must protect.

What people get wrong about KYC

People often think KYC is a universal requirement for any online service, so they assume a VPS host must ask for a passport. That is wrong. KYC is a legal duty only for regulated financial institutions like banks and exchanges. A hosting provider has no such obligation, so asking for your ID is a choice, not a requirement. If a host asks, it is for their own fraud protection, not because the law says so.