What Is Know Your Customer (KYC)?
In an increasingly global economy, financial institutions are more vulnerable to illicit criminal activities. Know your customer (KYC) standards are designed to protect financial institutions against fraud, corruption, money laundering and terrorist financing.
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đź•’ 12:58 PM
đź“… May 04, 2025
✍️ By Ecojames
What Is Know Your Customer (KYC)?
Know Your Client (KYC) is a standard in the investment industry that ensures advisors can verify a client's identity and know their client's investment knowledge and financial profile.
Know Your Customer Checklist
a) A photo identity card
b) Proof of address — utility bills and other official correspondence can be used
C) Passport
d) Voter’s ID card
e) Driver’s license
f) Official letter from a public authority or public servant
g) Bank passbook with photograph
h) Employee ID card
d) University or Board of Education card
What are the benefits of Crypto KYC?
1.‍Increased transparency and trust among customers
Verifying user identities benefits transparency and customer trust. When users feel confident that their cryptocurrency exchange is taking proactive and preventive measures to protect their accounts, they are more likely to continue using the service.
2.Less money laundering and scams
Between January 1, 2021, and March 31, 2022, more than 46,000 consumers reported losing over $1 billion in crypto to fraudsters. (Fletcher 2022) Vigorous identity verification can significantly reduce fraudulent activity and improve market reputation.
3.‍Reduced legal risk
KYC methods enable VASPs to prevent/limit fake identity instances, prevent money laundering, and assess customer risk by requiring government-issued identification and identifying financial history and assets. These steps allow businesses to reduce legal and regulatory risks.
4.‍Increased market stability
The cryptocurrency market is notoriously volatile because of suspicious, anonymous transactions. KYC programs that feature increased identity verification contribute to the market’s overall stability and value growth.