Golden Recursion Inc. logoGolden Recursion Inc. logo
Advanced Search
Know your customer (KYC)

Know your customer (KYC)

The process of identifying and verifying customers in order to assess risk, potential corruption, and suitability for products.

History

KYC was created as a response to anonymous owners of cryptocurrency. According international banks agreement “Travel rule” every financial organization must know who and whom they transfer money. It helps to fight illegal transactions and financing terrorism.

When crypto exchanges were decentralized (DEX) many government regulators were trying to ban them for his anonymity. But when exchange became centralized (CEX) government regulators required to deploy the verifications process or they will ban them. And companies start to create different processes of verification, given the common name “Know your customer” (KYC).

Today only the biggest crypto companies created KYC. The middle and small size companies didn't. It helped to save their clients. Some companies even attract new clients, promise won’t deploy this process in the future. But it means that these companies won’t get a legal license and can’t to working with legal finance institutes.

Types of verification

The simplest and most popular way to verify is to send SMS to the phone. Another - take a photo with your ID card and your crypto wallet number. Also can use a private driver's license or passport. Another way is Face ID. In online mode, you must film yourself on camera, following the tips.

But all these ways are not reliable. And companies don't hurry to improve this process because fearing that many clients unfollow them. A good example here is Binance. It welcomed government oversight. At the same time, the firm was withholding information from regulators, maintaining weak checks on customers, and acting against its own compliance department’s recommendations, a Reuters investigation has found.

But on the other hand, some countries have been watching closely for this process. In South Korea, the crypto exchange Bithumb has banned the transfer of crypto assets to unidentified wallets. All other exchanges in the country must do the same by March 25, 2022. Users can now only register their personal wallets. When registering, users will have to undergo KYC verification, meaning they will be required to take a picture of their wallet number along with their ID card.

Timeline

Further Resources

Title
Author
Link
Type
Date

News

Title
Author
Date
Publisher
Description
November 21, 2019
The Economic Times
A huge number of Paytm user have already approached the companys cyber cell and RBI's ombudsman.
DNA Web Team
November 21, 2019
DNA India
PayTM founder warns customers against fraudulent messages, calls - In a series of tweets, the founder said that the fraudsters are trying to take over customers' accounts by sending text and emails for KYC (Know Your Customer) verification.
Ashley Coutinho
October 30, 2019
@bsindia
Read more about In move towards lighter-touch regime, 80% FPIs classified as Category-I on Business Standard. Prior to the reclassification, less than 3 per cent of the FPIs were part of Category-I and more than four-fifths were part of Category-II.
Press Trust of India
October 24, 2019
@bsindia
Read more about TRAI recommends KYC verification of existing and new DTH set-top boxes on Business Standard. It also said there is no need to mandate physical verification at regular intervals as it will incur a huge cost to the DTH operators and inconvenience to the consumers
Nidhi Rai
October 16, 2019
@bsindia
Read more about LivQuik seeks approvals from RBI to start foreign remittance services on Business Standard. Future Group payments affiliate LivQuik to launch foreign remittance services at stores
SHOW MORE

References

Golden logo
By using this site, you agree to our Terms & Conditions.