The second point is much easier (not all jurisdictions want this). As for the first point, of course you need to know your customer. User identity is the most important thing in crypto exchange. What do you need to know about the customer? The minimum requirement is identity verification with an international passport, ID or driver’s license. For example, Australia requires invoices, address registration, or bank payment. In general, verification is considered to have 2 key stages (no, this is not phone or email): verification of identity and verification of address.
For example, some impose very strict requirements for authentication – you need a personal presence via a webcam or verification via the front camera. Worth noting, the user’s editing and verification processes are quite typical for many sites, such as Amazon or Etsy.
According to the rules, the user receives full permission only after verification. They can then make trades and deposit their wallets.