By - 3 May 2023.
What You Need to Know.
If you’re in the world of crypto, you might have heard of KYC. It stands for “Know Your Customer,” and it’s an essential process for verifying the identity of crypto customers and those that operate crypto projects. In this article, we’ll go through everything you need to know about KYC and how it relates to the crypto world!
What is KYC and Why is it Important?
KYC is generally a process that companies use to verify the identity of their customers/users. It’s an essential part of the finance world, and it helps prevent money laundering, fraud, and other financial crimes.
When it comes to crypto, KYC is just as important. It helps ensure that crypto exchanges and other businesses are dealing with legitimate customers, which is especially crucial when it comes to fighting money laundering and is equally important for crypto investors to know that the projects they are dealing with, have some level of legitimacy.
What Does KYC Mean in Crypto?
In the crypto world, KYC means the same thing as it does in traditional finance. Crypto exchanges and businesses need to carry out KYC checks to make sure that their customers are whom they say they are. The difference is that the crypto world is still relatively new, and regulations are still being developed.
Is Crypto KYC Safe and Reliable?
One concern that people have about KYC in the crypto world is the safety of their personal information. KYC checks require you to provide personal information such as your name, address, and ID documents.
Reputable, regulated crypto exchanges will typically use secure and encrypted systems to store and handle your data. These exchanges are the ones that will normally allow you to convert crypto to fiat currencies, in readiness for bank transfers.
There are risks associated with KYC in crypto, but that is largely related to anonymous crypto projects asking their own investors to provide information for KYC purposes. If these projects are unregulated entities and still ask for this information, you should exercise caution.
Making KYC Safer Using Technology.
Why You Shouldn’t Bypass KYC for Crypto
Some people may be tempted to bypass KYC to protect their privacy but bypassing KYC is not only illegal but also risky!
If you use a centralised exchange that doesn’t conduct KYC checks, you could be exposing yourself to risks such as scams, hacks, and theft of your funds. Also, you might be unwittingly involved in illegal activities like terrorist financing and circumventing anti-money laundering (AML) controls.
How to Carry Out a KYC Check for Crypto
The process of carrying out a KYC check for your crypto project can vary depending on the business or the exchange. Generally, you’ll be asked to provide personal information such as your name, address, date of birth, and ID documents such as a passport or driver’s licence. You may also be asked for additional information such as your source of funds or your occupation. The exchange will then verify your information and confirm your identity.
If your exchange doesn’t have a built-in KYC solution to verify your identity, then it’s certainly worth using a third party to carry out a KYC check for your crypto project, giving your community and investors confidence in your credentials.
Should I Invest in a Crypto Project That Hasn’t Been KYC’d?
We cannot provide you with any financial advice or make any guarantees. If you decide to invest in a crypto project, you do so at your own risk; however, if you were to carry out a risk assessment on a project that had been KYC’d versus one that hasn’t been, the latter could be deemed as a higher risk.
It’s sometimes dangerous for the owners of a crypto project to be doxxed (this means personal information is released) to their investors due to death threats, and the like, which is where companies like Identitech are here to help.
It is important for a crypto project to have KYC carried out on itself because it helps to establish trust and credibility in the eyes of potential investors, customers, and regulatory authorities. By conducting KYC checks on their team members, the project can demonstrate that:
- They are committed to operating within a legal and moral framework
- Are taking steps to prevent fraud and money laundering
KYC checks can help to verify the identity of the team members involved in a crypto project, including the founders, executives, and developers. This can help to prevent bad actors from hiding behind anonymous identities, which is still a common practice in the crypto world.
Additionally, conducting KYC on the project team members can help to prevent potential legal and regulatory issues down the road. Regulators in many jurisdictions require that crypto projects conduct KYC checks on their team members and contributors, and failure to comply with these regulations can result in fines, legal penalties, and damage to the project’s reputation.
Conducting KYC checks on the team members of a crypto project is an essential part of ensuring transparency and compliance in the industry. By doing so, the project can build trust with investors, customers, and regulators, and demonstrate its commitment to operating within the legal framework.
How Do I Get My Crypto Project KYC’d?
KYC is an essential part of the crypto world. It helps prevent financial crimes and protects customers from scams and fraud. If you’re involved in the crypto world, it’s crucial to deal with reputable businesses that conduct proper KYC checks. And if you’re looking for a reliable and trustworthy KYC provider, look no further than Identitech.
At Identitech, we take KYC seriously and have developed a robust and secure system for verifying the identity of our customers. Our platform is user-friendly and intuitive, making the KYC process quick, cost-effective, and easy.
We also use the latest security measures to protect your personal information, so you can be sure that your data is safe with us.
So if you’re in the crypto world and need a KYC provider you can trust, turn to Identitech. Our team is dedicated to ensuring that our customers comply with regulations while also making the process as easy as possible. 8Bit Arcade is an example of a project we recently verified.
Contact us today to learn more about how we can help with your KYC needs.
What Gets Carried Out As Part of a Crypto KYC Check?
We are flexible with the projects we work with and are transparent about what checks and services we provide for their customers. Projects that we work with will have the opportunity for the following to be carried out or provided:
- Biometric verification
- Identity verification
- Anti-money laundering checks
- Project back-link page
- Risk-assessment interviews
- Risk reports
- Unique verified badge