Why get one and how does it help?
The ultimate goal of KYC is to keep everything transparent and spot illegal actions, such as financial fraud or money laundering attempts. Extensively implemented blockchain networks enable decentralized crypto transactions that can be absolutely anonymous. A common abuse of this ability by users is the main reason to adopt proper crypto verification and achieve full KYC compliance.
Going for KYC compliance is a win-win effort. You get to comply with common global standards and reinforce the overall security of crypto transactions that you carry out through a range of procedures, including the following ones.
In terms of the major efforts to implement to comply with KYC, exchanges for cryptocurrencies should carry out reliable identity verification. This includes thorough collection and verification of a customer’s name, date of birth, private or corporate address, and any related business information.
Keep in mind geolocation verification as well. Scammers frequently use VPN tricks to get away with various frauds. This is why geo-confirmation can serve as an ultimate KYC/AML tool.
All blockchain transactions must be regularly monitored with a heavy focus on suspicious actions and out-of-line patterns (e.g., huge one-time transactions or numerous transactions of the same amount in a row - cases where it is best to contact the transaction sender to double-check their intentions).
Your KYC-compliant monitoring should help identify high-risk customers based on the pre-composed risk profiles, keep track of all errors in the process, and prioritize out-of-the-ordinary activities.
for crypto industry
KYC in crypto implies a range of underlying procedures, including:
- ID verification
- Liveness check
- Geolocation confirmation
- Transactions monitoring
- User Screening
- New customer onboarding