KYC is a legal requirement for financial institutions, including crypto-asset service providers (CASPs) like Finst, which helps prevent others from misusing your identity.

During the KYC process, you fill in some personal information, such as your name and address, and you upload an identity document which is used to confirm that you are the person you claim to be.

Your information is only used for legally required checks and is not accessed or shared without strict purpose.

CASPs are required to store and secure your information safely in accordance with strict data and privacy regulations.

With the help of the information obtained through KYC, platforms are able to identify suspicious activities more quickly, providing users with extra protection against fraud.

For regular users, KYC does not change how you buy, sell or hold crypto, and once your identity is verified you can use the platform as usual within a more secure and regulated environment.

°Why Does KYC Exist and Is It Mandatory?

KYC exists to help prevent financial services from being misused for illegal activities such as money laundering, fraud or the financing of terrorism. In the Netherlands, the Anti Money Laundering and Anti-Terrorist Financing Act (Wwft) requires financial institutions to verify the identity of their customers. This applies not only to crypto-asset service providers, but also to banks, payment institutions, insurers and other financial service providers.

Supervisory authorities, such as De Nederlandsche Bank (DNB) and, in Finst’s case, the Dutch Authority for the Financial Markets (AFM), monitor whether entities comply with these laws and regulations. We understand that sharing an identity document does not always feel pleasant. However, this is a legally required step within the financial sector, so that services can be used more safely and potential abuse or misuse can be detected and prevented.

°How Does the KYC Process Work?

The KYC process is similar to creating a regular online account, but instead of only providing an email address and password, users are required to submit additional personal information to verify their identity, to confirm that you truly are who you say you are. Users are required to fill in personal information such as first and last name(s), residential address and date of birth. Furthermore, to verify the provided information, users must upload a valid identity document such as a passport, driver's license or ID card. In most cases, this verification is performed automatically and in a matter of seconds, for example through biometric technology such as facial recognition. Additionally, you may be asked for information about your income, the source of your funds or the purpose for which you want to use your account.