With the disclosure of Crypto platforms, the threats are on a stand up. It is not hidden that with the rise of ICO and crypto platforms the fraudulent deals are also at par. Scams and money-laundering is no more a surprise for those who run the platform and those who invest as well. So, what could be a probable solution for the problem?
Only if you have heard of a KYC (Know Your Customer), can you be on the better side. It is the most admissible option for people to protect themselves. For those who have little knowledge of this aspect, you are thankfully at the right place. In the further section, you will study more about KYC and its attached crucial strings.
How Does KYC Protect You?
Lesser known to many, KYC is an expert process through which the offer or gets the genuine chance to know the person who is coming to invest on their platform. Primarily, whenever a cryptocurrency comes to the market, they are open for the public to buy it. These are the tokens that are present in the form of a utility token or a security token. Utility tokens are in the form of digital vouchers given to potential investors. The utility tokens are tradable in the cryptomarket but without any ownership. Whereas talking about security tokens, they are supported by some good valued tradable assets.
Once the project takes wing, the more the project’s hype, the more will be the token value. This will ultimately lead to more value when it will be converted to a fiat currency. Before the introduction of KYC, there was a lot of opaqueness in regards to money transactions. After the popping-up of KYC, the process has become a lot more transparent and investors’ data is easy to store. Besides, the money transaction can be traced easily by the platform owners to eliminate any space for misdeeds. In a nutshell, KYC is a process through which any person with unlawful and deceitful intentions can be countered.
What are the Potential Benefits of a KYC Platform?
By now you must have realized the importance of having KYC. However, below-mentioned are some of the crystal-clear benefits of a KYC platform. Review them:
- With the proper KYC details, the offer or and the investor can successfully create the foundation of credibility with the bank.
- ICO projects are now highly compliant, there is not much room for any fraudster to accomplish any illicit tasks.
- KYC compliance, allows ICO’s to reach the maximum no. of people as much as possible and also permits the number of jurisdictions to occur. Compliance like this creates a broad space for investors to invest.
- Needless to say, the emergence of KYC has made ICO management much easier.
- With KYC, it is now easy to list KYC compliant crypto tokens on the crypto exchange platforms.
AML(Anti Money Laundering)- An Alternative to KYC?
Likewise KYC, AML allows the platform owners to detect the ingenuine intentions of a person who is trying to invest. Personal information such as your name, date of birth, and current address is what needs to be provided in both KYC and AML procedure. To let deceivers away from getting engaged to acquire gains is the main purpose of an AML procedure.
To understand more about AML, you have to go through the below-mentioned aspects of it. Let’s study them.
- KYC- KYC allows you to pile up the necessary information of the investors, including digital versions of physical documents, and biometrics (if required) as well. Just ensure that the collected information is genuine and possesses no much risk to your business’s reputation, in any way.
- Transaction Monitoring- Transaction Monitoring points out your commitment to keeping an eye on the collected funds.
Every second person has a different opinion about the security of KYC. However, it still cannot be denied that KYC holds a paramount significance in maintaining a safe and secured platform. KYC’s execution is capable enough to relinquish the constant threat of deception. Thus, it is preferable to adopt the measures that can lead to a fruitful outcome, alleviating your concerns.