What is KYC and in what cases is it used?

What is KYC and in what cases is it used?


What is KYC and in what cases is it used?
"Know-Your-Customer" (KYC) is a mandatory identity verification process required to open an account or an exchange account. Thus, the client confirms that he is really who he claims to be. Financial regulators require verification for transparency of user transactions with fiat currencies. The requirements are based on the directive established within the framework of the KYC/AML (Anti-Money Laundering, Anti-Money Laundering) policy.
Any licensed financial institution is required to conduct a KYC check. This is an important element in the fight against money laundering and other financial crimes. After verification, it will become easier to track clients' money transactions and identify violations: fraud, criminal financing, money laundering, movement of stolen funds, etc.
The responsibility for compliance with the KYC conditions lies with the organizations themselves. If these conditions are not met or are not properly observed, then the supervisory authorities can apply serious penalties that can severely "hit" the business. Therefore, legal companies are very attentive to compliance with regulatory requirements.

Documents for a Proof of address check - kyc address verification
How does the KYC check work?
The procedure may vary slightly from company to company, but in general, the verification process is identical everywhere, and it takes place in several simple steps. Let's look at these steps in more detail to have a more complete understanding of the procedure.
Entering personal data.
This is the beginning of the acquaintance of the company with the client. First, the user specifies basic information about himself:
Gender and citizenship;
Date of birth;
Contact information (telephone or other means of communication);
Full address of residence;
Other optional data.
At this stage, it is important to provide only reliable information, so it is better to double-check all the data again and make sure that they match those indicated in the passport or other identity document. Otherwise, the KYC procedure will fail. And if the employees still do not notice the error and confirm your identity, then the problems may begin later. For example, when withdrawing money, this error may be detected, and the client will not receive his money. Everything is very strict here.
Presentation of an identity document.
At the second stage, you need to upload a digital copy of your identity document to a special form on the organization's website. A passport, a foreign passport, a driver's license or an ID can be used as such a document. The photo or scan of the document must be of high quality so that all the information can be easily distinguished by the checking staff.