Three verification emails in four months. That’s what I got from my main exchange last year.

First one in March: “Please update your proof of address.” Fine, uploaded a recent utility bill.

Second in June: “We need a new photo ID. Your previous one is expiring soon.” Okay, took a new selfie with my driver’s license.

Third in September: “Additional verification required. Please provide source of funds documentation.” Wait, what? You want my bank statements now?

Each time, the email made it sound like routine maintenance. “To keep your account secure.” “To comply with regulations.” Generic explanations that don’t really explain anything.

But something bigger is happening here. And if you’re getting these requests more often than you used to, you’re not imagining it.

What Changed in 2024-2025

The short answer: European regulations got real, and everyone else is following suit.

MiCA – Markets in Crypto-Assets regulation – fully kicked in across the European Union throughout 2024 and 2025. This isn’t some vague guidance document. It’s actual law with actual enforcement.

What MiCA requires from crypto exchanges operating in or serving EU customers:

• Enhanced identity verification for all users
  • Regular re-verification (not just one-time KYC)
  • Source of funds documentation above certain thresholds
  • Transaction monitoring and suspicious activity reporting
  • Stricter rules around who can access services

The United States doesn’t have MiCA, but various agencies have been pushing similar requirements through guidance, enforcement actions, and state-level regulations. The direction is the same – more verification, more documentation, more compliance.

Even countries that haven’t implemented specific crypto regulations are tightening general financial regulations that catch crypto exchanges in the net.

Why Exchanges Actually Like This

Here’s the part nobody talks about: exchanges benefit from increased KYC requirements in ways that aren’t immediately obvious.

First, compliance creates barriers to entry. Setting up the infrastructure to handle complex verification requirements costs serious money. Smaller exchanges can’t compete, reducing competition for the big players.

Second, verified users are stickier users. Once you’ve gone through extensive verification on a platform, you’re less likely to switch to a competitor. The hassle of doing it all again somewhere else keeps you where you are.

Third, more data means more control. Every document you upload, every piece of information you provide, gives the exchange more leverage. Need to freeze your account? They have plenty of justification buried in their terms of service about verification compliance.

I’m not saying exchanges deliberately pushed for these regulations. But once regulations exist, exchanges adapt in ways that serve their interests, not just compliance requirements.

The Re-Verification Cycle

Used to be you verified once when creating an account, and that was it. Maybe they’d ask for updated docs if your ID expired, but that was years away.

Now? Verification is ongoing. Some exchanges want updated documents every six months. Others trigger re-verification based on your activity – make a large withdrawal, suddenly you need to verify again.

This shift from one-time to periodic verification is huge. It means you’re never really “done” with KYC. Your access depends on staying current with whatever the exchange decides to request.

And the requests keep expanding. Started with basic ID. Then proof of address. Now some exchanges want:

• Bank statements showing deposits to the exchange
  • Payslips or tax documents proving income
  • Explanation of crypto source if you deposited from another wallet
  • Video verification calls
  • Biometric data

Each layer adds friction. Each layer gives exchanges another reason to potentially limit your access if you don’t comply quickly enough.

What This Means for Your Data

Every time you upload documents to an exchange, you’re trusting them with information that could wreck your life if leaked.

Passport scans. Driver’s licenses. Utility bills with your home address. Bank statements showing your financial situation. Sometimes even tax returns.

That’s a complete identity theft package. And it’s sitting in databases that, historically, have proven vulnerable.

Major exchanges have suffered data breaches. In 2023 and 2024 alone, several prominent platforms had user information compromised. We’re talking millions of users having their personal documents exposed.

When you verify with multiple exchanges – which most people do – you’re multiplying the exposure. Five exchanges mean five potential breach points, all with your complete documentation.

The Compliance Trap

Here’s where it gets frustrating: you can’t really say no.

If an exchange requests re-verification and you ignore it, they’ll eventually restrict your account. Maybe you can still trade but can’t withdraw. Or maybe they freeze everything until you comply.

You’re in their system. Your crypto is in their custody. They have leverage, and they know it.

This creates a dynamic where exchanges can effectively force compliance with whatever new requirement they introduce. Don’t like providing your tax returns? Too bad – your funds are locked until you do.

The alternative of just leaving is expensive. Withdrawal fees can be substantial, especially if you have positions across multiple coins. And where would you go anyway? Other exchanges have similar requirements.

The Algorithm Problem

Many verification triggers are automated. Some algorithm decides your account needs review based on criteria the exchange won’t disclose.

Maybe you withdrew a bit more than usual. Maybe you logged in from a different location. Maybe you traded a coin that their compliance system flagged. You’ll never know exactly what triggered it.

This means you can’t really avoid re-verification requests by adjusting your behavior. The rules aren’t clear, and they change without notice.

What You Can Actually Do

Option one: Just accept it. Keep complying with verification requests as they come. Upload documents when asked. Go through video calls if required. This is the path of least resistance.

Downside: You’re continually feeding more personal data into systems that will eventually get breached. And you’re dependent on exchanges deciding you’re sufficiently verified to access your own crypto.

Option two: Minimize exchange exposure. Use exchanges only when absolutely necessary, keep crypto in your own wallets the rest of the time.

This is what I shifted to after that third verification request in September.

The Wallet-First Approach

The core idea: keep crypto off exchanges except when you specifically need exchange features.

For buying crypto with regular money, you still need exchanges. The fiat on-ramps run through these platforms, and that requires KYC. Can’t really avoid it.

But everything else? Doesn’t require exchanges if you set things up differently.

I keep the bulk of my crypto in a hardware wallet. Smaller amounts I might want to move around live in a software wallet like MetaMask. Nothing sits on exchanges long-term.

When I buy crypto, I withdraw it immediately. The purchase clears, I send it to my wallet, done. It’s on the exchange for maybe twenty minutes total.

The Swapping Solution

The question everyone asks: “But how do you trade if your crypto isn’t on exchanges?”

Answer: I don’t really trade in the active sense. I hold positions and occasionally convert between coins. That doesn’t require traditional exchanges.

For conversions, I use instant swap platforms like Changeum.io. These work wallet-to-wallet – send crypto from your wallet, receive different crypto back. No account, no verification, no custody beyond the transaction itself.

Need to convert some Bitcoin to Ethereum? Takes about twenty minutes. Go to the site, set up the swap, send BTC, receive ETH. All direct from my wallet to my wallet.

Because there’s no account and no custody, there’s nothing to verify. No documents to upload. No re-verification requests six months later. Just one-time swaps when you need them.

Why This Works

The key difference: instant swap platforms aren’t custodial financial institutions.

Traditional exchanges hold your funds, which makes them subject to banking-style regulations. They’re financial intermediaries, so they need to know who their customers are and monitor for suspicious activity.

Instant swap services just facilitate conversions. They don’t hold your funds beyond the swap transaction. Legally, they’re in a different category, which means different regulatory requirements.

This might change eventually – regulations evolve, and authorities could decide these services need stricter oversight. But for now, they operate without the verification burden that exchanges carry.

What I Still Use Exchanges For

I kept one exchange account – Coinbase – for one specific purpose: buying crypto with dollars.

When I want to add to my positions, I use Coinbase to convert fiat to crypto. Then immediate withdrawal to my wallet. The whole process takes maybe half an hour from purchase to having crypto in my custody.

This means I’ve verified with one exchange instead of three or four. One potential data breach point instead of multiple. One platform that might request re-verification instead of several.

Everything else – holding, converting between cryptos, managing my portfolio – happens outside the exchange system entirely.

The Trade-Offs

This approach doesn’t work for everyone. If you’re actively trading with leverage, limit orders, and complex strategies, you need what traditional exchanges provide.

If you want to keep significant funds ready for instant trades, having them pre-deposited on an exchange makes sense despite the custody risk.

If you’re dealing with obscure altcoins that instant swap platforms don’t support, you might need exchange access to those specific pairs.

But for regular people just holding crypto as an investment and occasionally rebalancing? The wallet-first approach eliminates most of the verification hassle while actually improving security through reduced custody exposure.

The 2026 Reality

Verification requirements aren’t going to decrease. Every major jurisdiction is moving toward more oversight, not less. Exchanges will continue requesting more documentation, more frequently.

This isn’t temporary tightening that will relax later. It’s the new normal, and it’ll probably get stricter over time.

You can either accept being in that system – periodic re-verification, expanding documentation requests, increasing data exposure – or you can structure your crypto management to minimize dependence on custodial platforms.

Neither option is perfect. But at least with the wallet-first approach, you’re not repeatedly uploading sensitive documents to multiple platforms that will eventually have security incidents.

What to Do Right Now

If you’re tired of verification requests, here’s a practical path forward:

Start moving crypto off exchanges and into your own wallets. Don’t do it all at once if that feels risky. Move small amounts, get comfortable with the process, then gradually migrate everything.

Test instant swaps with amounts you’re comfortable potentially losing (though you won’t). Services like Changeum.io let you try small conversions to see how the process works before committing to larger amounts.

Keep one exchange account for fiat on-ramps if you need it. Close or stop using the others. Reducing your footprint across multiple platforms reduces both hassle and data exposure.

Next time you get a re-verification email, ask yourself: do I actually need this exchange account, or am I just using it out of habit?

The Bigger Picture

The increasing verification requirements reflect a fundamental tension in crypto.

Cryptocurrency was supposed to be about financial sovereignty – controlling your own assets without intermediaries. But most people interact with crypto through centralized platforms that function exactly like traditional financial intermediaries.

The result: you’re using decentralized money through centralized systems that are becoming progressively more regulated and restrictive.

You don’t have to completely exit that system. But recognizing that alternatives exist – ways to hold and convert crypto without constant verification demands – at least gives you options.

Those re-verification emails aren’t going to stop. Regulations aren’t going to relax. Exchanges will keep requesting more documentation.

The question is whether you’re comfortable with that reality, or whether it’s time to explore approaches that involve less custody and less verification.

For me, that third verification request was the tipping point. Enough was enough. Moved to a wallet-first system, started using instant swaps for conversions, and drastically reduced my exchange exposure.

Haven’t gotten a re-verification email in months. Because the only exchange that has my information barely holds my crypto long enough to send those kinds of requests.

That peace of mind – not wondering when the next document request will arrive – turned out to be worth the small effort of changing my setup.