The case for a ‘non-mandatory KYC’ model — Interview with Toobit

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Cryptocurrency exchanges have to do careful maneuvering to balance between global compliance requirements and the flexibility and speed that retail traders demand. While regulations like the EU’s MiCA framework push for transparency, a significant portion of the market still prioritizes low-friction access and diverse trading tools.

Toobit is a global exchange navigating this mixed landscape. Launched in 2022, it serves over 4 million traders with its daily volume exceeding $30 billion. “Toobit is built with one goal in mind: making trading feel safe, intuitive and genuinely empowering,” says Ray Lee, co-founder and CEO of Toobit.

In this interview, Lee discusses the future of non-mandatory KYC, the impact of evolving regulations and his vision for an exchange that prioritizes user choice alongside institutional-grade security.

Cointelegraph: Regulation and compliance have become central topics as the industry matures. How do you see these forces shaping the future of global crypto exchanges?

Ray Lee: Compliance is relatively new to crypto compared to traditional finance, and in many ways, it is helping the industry mature. Regulations like MiCA in the EU are pushing exchanges to step up their game with real transparency, stronger security and better risk controls, such as enhanced Anti-Money Laundering (AML) and Know Your Customer (KYC) practices and proof of reserves.

While fully licensed exchanges will attract institutional capital, there is still an important niche for platforms that prioritize privacy and flexibility. Many traders value that permissionless spirit that helped shape crypto in the first place.

At Toobit, we aim to bridge both sides. We follow global compliance standards to keep the platform safe and trustworthy, and we also preserve user choice so traders can choose the experience that fits them best. Whether you are a professional or an everyday trader, you will find an environment designed to support the way you want to trade.

CT: Where do you see non-mandatory KYC exchanges fitting into the broader market as trading behaviors evolve? How does Toobit respond to that?

RL: Non-mandatory KYC exchanges still play an important role for many traders, especially those who value speed, privacy and low-friction access. But it’s worth clearing up a common misunderstanding: non-mandatory KYC does not mean non-compliant.

Modern exchanges have far more sophisticated ways to manage risk than simply collecting IDs. At Toobit, we focus on protecting users through strong infrastructure rather than unnecessary bureaucracy.

We combine Know Your Transaction (KYT) monitoring from partners like Elliptic and Beosin with ISO-level security, institutional custody (Fireblocks and Cobo) and our Bee-Safe protection stack to protect our community.

These systems ensure that trader funds are clean, traceable and safeguarded without forcing everyone into the same onboarding route. Most traders can start trading immediately without KYC, but if someone triggers risk alerts or shows unusual patterns, we request verification right away.

Our philosophy is simple: traders should have real choice, and safety should come from strong systems, not from added layers of unnecessary friction.

CT: How has your experience driving localization and global operations influenced the way you design Toobit’s products for different types of traders?

RL: My experience has shown that a single, uniform platform cannot serve the diverse needs of a worldwide crypto audience. We apply this by designing Toobit’s products with modularity and cultural fit in mind.

For institutional or pro traders, the priority is straightforward. They need a high-performance matching engine, deep liquidity and strong application programming interface (API) connectivity, no matter where they operate.

For our retail traders, the needs are more nuanced. Localization in this sense goes far beyond language. It means supporting different trading cultures, offering an easy fiat-to-crypto gateway for local currencies and creating an interface that feels simple and intuitive from the first tap.

We design our product features to be accessible, bridging the gap between advanced tools and the everyday trader while respecting their local trading behavior. We think this tailored approach is key to achieving true global reach.

CT: What safeguards Toobit has built to protect users in the event of technical issues or platform-side failures?

RL: Toobit’s Bee-Safe asset protection strategy is multilayered:

• Financial shield: We established a $50 million shield fund that automatically safeguards user assets against losses resulting from internal technical or security failures. This fund is fully financed by Toobit.
• Asset custody: The majority of user assets are secured in multisignature cold storage, protected by institutional partners like Fireblocks and Cobo. This eliminates a single point of failure and ensures assets are offline and safe.
• Transparency: We keep every user asset fully backed, with reserves that go beyond the typical 1:1 standard. For safety, we only make part of our onchain hot wallet balances public in our proof of reserves. The rest of the user funds are stored securely in institutional-grade cold wallets. All user funds are always covered and secure.

These layers work together to guarantee full coverage and protection of customer assets, supporting transparency and operational integrity without putting security at risk.

CT: Derivatives are a market traditionally considered exclusive for professional traders. How does Toobit provide inclusivity in the space?

RL: Derivatives trading shouldn’t feel intimidating. So instead of keeping up with how the market typically manages derivatives, we’ve focused on making the space more accessible.

Our biggest inclusivity tool is copy trading. It lets people instantly mirror the strategies of top professional traders on our futures market with zero slippage. Anyone can tap into high-level trading outcomes without needing deep market knowledge.

We also offer event contracts. Instead of trying to make sense of complex instruments, people can simply trade yes or no outcomes based on real-world events. It is a straightforward way to participate in derivatives without the mental hurdle that usually turns new traders away.

Everything is built into a clean, intuitive interface designed to reduce intimidation and make advanced tools feel comfortable, familiar and genuinely accessible to everyday traders.

CT: What advancements has Toobit made on the trading side to help users execute strategies more accurately and efficiently?

RL: We built Toobit after seeing the same thing everyone else saw: traders asking for more and not getting it. From day one, we’ve kept a close eye on what people actually need, and we’ve evolved with those expectations. That’s why we’ve pushed hard on upgrades that make a real difference, especially around speed and precision, where execution matters most.

• Zero-slippage copy trading: Traders mirroring a professional trader’s strategy can execute at the exact same price, which is essential for accurate risk and profit management. We are so confident about this that we offer 100% refunds for any slippage that might be incurred from copy trading some trading pairs.
• TradingView integration: We integrated with TradingView to provide real-time market data visualization and access to its vast suite of advanced charting tools and indicators, allowing traders to conduct in-depth analysis and execute data-driven strategies.
• Futures BBO: We introduced the best bid offer (BBO) feature, which combines the speed of market orders with the precision of limit orders. This allows traders to eliminate manual price entry, matching the most competitive bid/ask levels directly for faster, optimized execution in volatile markets.

CT: What shaped your vision for what a modern exchange should look like, and how does that vision drive Toobit’s current direction?

RL: My vision for a modern exchange comes from years of watching crypto grow and reinvent itself. It is no longer just a place to trade. It has become a fast-moving technological frontier. That is why a next-generation exchange cannot stay confined to simple order matching. It needs to adapt, evolve and bring new technologies into the hands of everyday traders.

This is the path guiding Toobit today. We are building professional, high-performance trading infrastructure while also investing in the ideas that will shape the future: decentralized execution layers, AI-powered trading tools, smarter risk-management systems and dynamic products that respond naturally to changing market cycles.

Our long-term vision is to create a unified environment where centralized liquidity, decentralized technology and AI-driven decision support come together and support each other.

Toobit is not just keeping pace with the industry. We are preparing for what the next era of crypto will require.

• #Interview
• #Privacy
• #KYC
• #Cryptocurrency Exchange
• #Transparency
• #DeFi
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