Introduction to KYC

What does KYC mean?

KYC is an identity verification procedure used by all financial institutions from crypto exchanges to national banks. Know Your Customer identifies a person for security purposes and builds trust between customers and service.

This system was created as a means to stop financial transactions for money laundering and financing criminal organizations. The data provided by new customers is used to check transactions for illegal activity. At the same time, it means protecting a person's account and confirming their actions. In the era of cryptocurrencies, keeping track of where money is going and from whom has become more difficult. Know Your Customer protects all users.

How does it work?

For verification, you need to provide a package of documents. Requirements differ depending on the company, most often the information set includes:

• full name and surname;
• date of birth;
• e-mail address;
• phone number to which SMS confirmation will be sent;
• place of residence or a document that confirms the fact of residence (receipts for the Internet, payment of utilities, etc.);
• passport, ID, or driver's license.

It’s not enough just to provide scans of documents. To undergo the procedure, you may be asked to send a photo with a passport or appear at the bank in person. The first option is typical for online services. Please note that if some part of the data changes, it needs to be updated, otherwise certain actions, such as withdrawing money, will become unavailable. Most often, identification is requested even before your first operations. Besides, there may be daily withdrawal limits. The time for document verification depends on the company, usually, it takes up to two weeks.

Does everyone have to go through KYC?

First of all, it means protecting your assets. You will be able to claim your rights in case of an unsatisfactory transaction. The larger the amount, the more documents you may need. The basic level is suitable for small operations, and if you use large amounts, you need stronger protection. Customer confidence is also an important part of this system. Entering an exchange or giving your money to the bank, you need guarantees of their safety. With KYC, financial platforms become more reliable and protected from fraudsters. It has been proven that people trust more those banking structures that introduce multiple levels of identity verification. This also applies to the withdrawal of money. By providing your details, such as a phone number, you can enable additional authentication. So, if someone tries to hack into your account, you will be warned and can prevent this. The notification will come by e-mail along with the function of the temporary blocking of your account.

Control over money transfers does not mean losing your independence. This is an opportunity to see if there is any suspicious activity that threatens your overall security.