In this article, we'll introduce you to the concept of KYC and tell you why it's so important in the cryptocurrency sphere.
What is KYC and why is it needed?
KYC is a tool used by financial institutions and crypto platforms to identify and authenticate their customers.
KYC means “Know Your Customer”.
It is a procedure by which companies verify the identity of their customers and make sure that they are authentic and reliable.
KYC helps companies ensure that their customers are not involved in fraud, money laundering or other illegal activities. KYC is an important tool in the fight against financial crime and helps protect companies from legal, reputational and financial risks. KYC compliance helps crypto exchanges and platforms meet international standards and regulatory requirements. Many countries are implementing legislation requiring cryptocurrency platforms to comply with KYC.
KYC compliance allows you to access a wide range of financial services, enhances your status as a customer and simplifies cryptocurrency transactions. This procedure helps to create a safe and secure environment for all participants in the cryptosphere.
What information do I need to go through the KYC procedure?
The KYC (Know Your Customer) procedure consists of several steps that help to verify the identity of the customer and confirm their details.
The general sequence of the KYC procedure:
Registration
The first step is registration. The client fills out a registration form, providing basic personal data such as name, e-mail address and phone number.
Confirmation of identity
After registration, the client may be required to provide scanned copies of documents that prove their identity. This is usually a passport, driver's license or identification card. The cryptocurrency exchanges verifies the authenticity of these documents and compares the data provided with the information provided during registration.
Confirmation of residential address
To verify a customer's residential address, they may be asked to provide a utility bill, bank statement, or other documents containing their current address. Cryptocurrency exchanges verify the information provided and match it with the registration data.
Photo selfies or video identification
Sometimes crypto exchanges require customers to submit a selfie photo of themselves holding their ID, or even record a video proving their identity. This helps prevent scams using fake photos or fake IDs.
Each crypto exchange may have its own KYC procedures and requirements, but the overall goal is to provide a safe and secure environment for cryptocurrency financial transactions. They must also ensure a high level of security and privacy of customer data. They must comply with relevant legal requirements to protect personal data and take measures to prevent unauthorized access to information.
