kyc

Know Your Customer or Client (KYC) is a process you’ve probably already gone through without even thinking it had a specific name. Basically, it’s the set of techniques used by businesses to verify the identity of their customers. It ensures that the person using a service is who they claim to be, reducing risks like fraud, money laundering, and illegal activities.
KYC is particularly important in industries like banking and finance, where trust and security are essential. By collecting and verifying customer information, companies can comply with legal regulations and maintain a safe environment for their services. KYC methods typically involve collecting personal information such as a customer’s name, date of birth, address, and government-issued identification (e.g., passport or driver’s license).
Many companies use online verification systems where customers upload photos of their ID and a selfie for comparison. Others may request physical copies or in-person verification. Advanced methods like biometric scans and AI-based tools are also becoming common to streamline the process and enhance security.
In other words, KYC is the way regulations reach the common financial user, who must identify themselves in order to use these services. And yes, it could apply to cryptocurrencies, depending on what you’re doing.
Why KYC at all?
The short answer to his question is that people launder money and commit other financial crimes all the time. The United Nations Office on Drugs and Crime estimates that globally, between 2% and 5% of GDP is laundered annually, amounting to approximately €715 billion to €1.87 trillion. By verifying customer identities, financial institutions can detect and deter illicit activities, ensuring the integrity of the financial system. Implementing KYC procedures helps mitigate these substantial risks.

‘Helps mitigate’ is a key part here, though. KYC is a technique among others, and it’s not perfect. These regulations are enforced worldwide, with each country tailoring its approach to meet international standards set by organizations like the Financial Action Task Force (FATF). However, criminals continuously adapt to the rules and find ways to bend them. They use advanced methods like creating complex networks of shell companies or falsifying documents to obscure their dubious transactions.
Other KYC issues
Besides the above, not all countries enforce KYC and anti-money laundering (AML) regulations equally, and even in countries with strict KYC laws, enforcement can be inconsistent. The sheer scale of global financial transactions makes it challenging for KYC systems to catch every suspicious activity. Financial institutions process billions of transactions daily, and even with automation, some illegal activities could slip through.
Now try to imagine the illegal percentage without KYC. That’s why we have to identify ourselves to use financial services. However, this identification process can be a burden for people that aren’t committing crimes, and not only because they have to show their IDs: it’s because how their ID’s and personal data are stored and used by companies.
They could misuse or sell this data to third-parties for different purposes, including aggressive marketing that nobody asked. Not to mention that hackers could breach their systems, steal everything, and re-sell it on the Darknet. The larger the company, the larger the prize to hackers. We could say KYC is a necessary evil, but decentralizing our information and funds seems to be a better option.
KYC in the crypto world
You could be thinking that the point of crypto is kind of to be anonymous, or at least, more private and without limiting requirements. Cryptocurrency was created to be inclusive and free. Free from governments, free from banks, free from red tape. It still could be (free from most old things), but centralized companies aren’t the same. They must comply with regulations to keep operating, and that includes KYC. So, naturally, companies like crypto exchanges, crypto funds, crypto investment intermediaries, custodial wallets, and so on, will apply KYC in most cases.
ID Verification (KYC) on Biconomy, a global crypto exchange
When you sign up for a regulated crypto exchange, for example, they might ask for your name, address, and a copy of your ID — just like a bank would. This, of course, eliminates some of the freedom that crypto provides, so the crypto community has mixed feelings about KYC. On one hand, it builds trust and opens doors for broader adoption by aligning with government regulations.
On the other hand, it challenges the privacy-focused nature of the crypto world. Despite the debate, most major exchanges, like Binance and Coinbase, have embraced KYC to stay compliant, and if you want to use their services, you’ll have to identify yourself. Now, there’s still a way to avoid KYC: transact in a fully peer-to-peer (P2P) manner, without intermediaries.
That could be risky, though. The other party involved could scam you, so that’s why we often prefer regulated intermediaries. In Obyte, we’re aiming to erase intermediaries and go fully decentralized, so we developed conditional payments. These payments rely on smart contracts (and an arbiter, optionally) that lock funds until agreed conditions are met. For instance, you exchange tokens only when both parties fulfill their parts of the deal, ensuring security and trust without needing middlemen or complex verification processes.
Ready to try it? Conditional payments and contracts with arbitration are built-in in the Obyte wallet, which is available to everyone!

Featured Vector Image by redgreystock / Freepik
Originally Published on Hackernoon

#kyc #KYCVerification #aml #CryptoRegulation #Obyte

🚀 Como começar a investir em Crypto de forma segura em 2026 para iniciantes
O mercado de crypto sempre tem oportunidades, mas também vem com riscos. Se você é iniciante e quer começar de forma segura, eu recomendo seguir os passos básicos a seguir.
Primeiro, escolha uma exchange confiável para criar uma conta. Pessoalmente, estou usando a Binance porque o ecossistema é bastante completo e fácil de usar para iniciantes. Você pode se inscrever aqui: https://www.binance.com

No mundo em rápido crescimento das criptomoedas, regulamentações e segurança são cruciais para garantir a segurança dos usuários e de seus fundos. Conhecer Seu Cliente (KYC) é um mecanismo que desempenha um papel essencial na criação de um ambiente de negociação seguro. Mas o que exatamente é KYC e por que é exigido pelas exchanges de criptomoedas? Neste artigo, exploraremos a importância do KYC, os documentos necessários para verificação e como ele protege os usuários de fraudes e golpes.
O que é KYC?
KYC significa Conhecer Seu Cliente. É um processo padrão de verificação usado por instituições financeiras, incluindo exchanges de criptomoedas, para identificar e verificar a identidade de seus clientes. Ao coletar informações pessoais, o KYC garante que todos os usuários sejam quem afirmam ser, reduzindo o risco de atividade fraudulenta na plataforma. Este processo é particularmente crucial na prevenção de atividades ilegais, como lavagem de dinheiro e financiamento do terrorismo.

Aqui está uma rápida olhada na última agitação em torno da Pi Network! 🚀
A Pi Network está fazendo progressos com sua migração para a Mainnet,
um passo crucial para os usuários utilizarem totalmente suas moedas Pi mineradas.
O foco está fortemente em completar #KYC (Conheça Seu Cliente) para milhões de usuários, o que é essencial antes que seus saldos possam ser migrados para a carteira Mainnet.
Esse processo está acelerando, abrindo caminho para a fase aberta da rede. 💪
O ecossistema também está se expandindo com novos aplicativos descentralizados (DApps) integrando-se ao Pi Browser, adicionando mais utilidade à rede. Por exemplo, um novo jogo de quebra-cabeça chamado Fruity Pi foi aprovado, permitindo que os usuários gastem tokens Pi dentro do jogo. Esse foco em casos de uso do mundo real e expansão de utilidade é uma prioridade chave para a equipe central #PiCoreTeam . 🎮🛍️