We all are well aware that money laundering is a critical problem worldwide. With the rise in digitization, the threats of security breaching, criminal activities have also surged. Before you start crypto trading, you will need to verify who you are. Just like any other financial institution, which asks you to submit KYC (Know-your-customer) details, every crypto platform across the world makes KYC mandatory in order for users to access the services available on the platform.
Whether it is buying, selling, or exchanging crypto, KYC has to be completed. But why is that compulsory? How does it benefit crypto traders? We will answer these questions today in the blog. Let’s walk through it…
KYC stands for know your customer or know your clients. A process to verify customers’ identity by taking his/her identification document such as Aadhar, Voter ID, Pan Card, driving license, etc. Common with any financial business or service, the KYC process has been made mandatory so that illicit activities can be prevented. Whether it is a bank, stockbrokers, or crypto exchange platform, KYC is a must-to-follow procedure.
The purpose of KYC is to confirm that a customer is real who is or pretending to be. Also to prevent multiple illicit activities such as money laundering, funding terrorism, tax evasion, and many other rising digital crimes.
This is the primary reason why every financial institution has its security compliance in place. You may be able to register with crypto exchanges without performing KYC but in order to gain complete access to the services, you have to submit and verify the KYC.
KYC (Know your customer) is mandatory to get access to the full service of any major cryptocurrency exchange. The process ensures that a customer is registered after complying with regulatory rules and laws.
The motive behind making KYC a mandatory requirement is to curb the illegal activities or trace the culprit who can use the platform to run any illicit activity. Major cryptocurrency exchanges like CrossTower make use of these data to keep a track of transaction patterns and ensure safe and compliant transactions.
In case if a crypto exchange platform registers customers without a KYC, they can be held liable if a customer runs away after committing any crime using the exchange platform. This is the primary reason why major crypto exchange platform has made KYC a mandatory requirement as a part of their compliance.
Typically, a customer requires to provide certain documents during the KYC. Though, the process can be changed on different exchange platforms based on their customer on-boarding process. Here are some of the KYC basics a customer needs to provide :
Further, a customer can be asked to present a few more details as well. Well, it heavily depends on the onboarding process a platform has set. After a customer submits the required documents, the exchange verifies them and makes a confirmation.
Stay tuned with us to learn more about cryptocurrencies. For help and information, feel free to reach out to our super helpful support team at email@example.com. A courteous response will be sent at the earliest convenience.
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