KYC service for Initial Coin Offering
The search for a source of financing is one of the critical factors in the development of companies. Attracting investments using traditional financial instruments is a complicated and lengthy process. Therefore businesses are looking for more convenient ways to finance their projects. This is how the ICO market was born.
For all its effectiveness as a project funding mechanism, the ICO market is highly vulnerable to scams and financial crime. The implementation of comprehensive KYC for ICO will help increase the security of the Initial Coin Offering, build trust, attract more investors, and ensure compliance with rapidly changing requirements.
What are ICO and IDO
ICO, or Initial Coin Offering is one of the newest forms of investment that has emerged since the advent of cryptocurrencies. It involves raising funds for initial capital for projects. ICO is popular among those planning to develop new services or implement new technologies.
The investment scheme is simple: the user invests money and receives a certain amount of tokens in return. If the project is successful, the investor can expect to receive a certain profit. The company that issues tokens exchanges them for one of the cryptocurrencies or fiat currencies (US dollar, euro), thereby receiving funding for the launch and development of the project.
ICO tokens:
KYC for Initial Coin Offering
KYC stands for "Know your customer" and, in a nutshell, is user identification. The use of KYC in ICOs helps prevent scams and illegal financial transactions. In many countries, regulators oblige crypto exchanges to implement KYC and AML (Anti-Money Laundering) procedures to detect and prevent revenue from illicit activities.
The rules regarding the ICO vary, depending on the jurisdiction (the country where the Initial Coin Offering is held). At the same time, the best option for any startup is to exercise caution and make sure in advance that all the necessary KYC / AML processes are implemented. You can implement identity verification for both your team members and investors.
- Ensuring KYC/AML compliance for ICO to avoid conflict with global regulators
- Providing the total legality of the ICO for the legal withdrawal of money for the project launch
- Increasing the reputation of the ICO in the market
- Simplification of cooperation with banks
- Scam prevention
So, how to bypass KYC requirements for ICO and achieve KYC and AML compliance? A comprehensive KYC service will help you check the identity of investors before they receive permission to invest in your ICO project. For example, KYC verification can be implemented at the registration stage. KYCAID provides easy, quick, and efficient online checks based on AI algorithms.
It is essential to exclude the possibility of investors from certain countries participating in ICOs, to comply with the legal framework of the states in which your business interests are represented. So, some regulators exclude investors from jurisdictions where crypto assets are prohibited. Therefore, knowing who your customers are and where they are is critical to compliance. Using the services of an ICO KYC provider, you can easily check where an investor is and, if necessary, restrict access to buying your tokens.
Main Check Methods
