In the rapidly evolving and cyberattack-prone world of digital currencies, implementing Know Your Customer (KYC) is a critical safeguard for investors. Suppose you are a user who used to complain about the complexity of the KYC process when signing up for your account in Tokenize Xchange. In that case, this article will help you understand why KYC is complicated and how important it is. 

What is KYC?

KYC stands for Know Your Customer (or Know Your Client). It’s a regulatory and ethical requirement primarily in the financial services industry to verify the identity of clients and understand their financial behaviors. To finish the KYC process, users are required to provide their personal information such as their passport (or identity card), a photo of themselves, and their address.

KYC procedures are applied to prevent suspicious financial activities, comply with Anti-Money Laundering (AML) Laws, and protect the network against illegal activities. Though KYC means verifying the customer’s identity, it also helps the exchange to understand their customers’ typical transactions and behavior.

Top 5 FAQs about KYC

1. Which products or services on Tokenize Xchange require compulsory KYC?

=> The KYC process is mandatory to set up an account with Tokenize Xchange. This gives you access to Tokenize Xchange products and services.

2. How to complete Individual KYC verification?

=> You can refer to the article Account Opening for a step-by-step guide.

3. How long does the KYC verification process take?

=> Due to the complexity of information verification, KYC verification may at times take up to 1 week or more.

Users residing in Singapore will be verified faster and better by linking with MyInfo – a digital service that enables citizens and residents to manage their government-verified personal data better.

4. What should I do if the KYC verification process exceeds 1 week?

=> If you encounter any issues with KYC verification, kindly contact us by submitting a case to our Customer Support.

5. Why is KYC so important?

Prevent Cybercrimes  

Since the blockchain network is decentralized and not under the control of any institutional regulation, it is more likely to be exploited by financial criminals for illegal purposes, for example, money laundering.

KYC was built to help manage the identity of traders in the system, preventing criminal activities

Hence, KYC was built to help manage the identity of traders in the system, preventing criminal activities. Adopting KYC would become a key solution to the loss and fraud activities that occur in crypto.

Building Trust and Transparency for Customers

Cyberattacks targeting crypto exchanges in the past have caused damage to the trust of customers. The KYC process would allow exchanges to identify their customers, eliminating individuals with suspicious behavior, and thereby preventing illegal activities or attacks on the exchange.

For new customers, knowing that KYC processes are being implemented will let them know that they are trading in a safe platform with trusted users due to their clear identity verification. Also, this is especially important for peer-to-peer (P2P) trading services where users transfer money and get crypto coins directly from each other.

Also, the KYC process helps protect users’ benefits. In the case of losing crypto assets to a registered wallet is much easier to track than an anonymous one.

Adopting KYC is also a key solution to the loss and fraud activities that occur in crypto. Losing your tokens to a registered wallet is much easier to track than an unregistered/ anonymous wallet.

Encourage Global Cryptocurrency Adoption 

The imposition of KYC regulation can be considered as a stage to legalize cryptocurrencies. Soon, all centralized and decentralized exchanges will be asked to adopt KYC regulations in line with international regulations to encourage the adoption of crypto worldwide.

The imposition of KYC regulation can be considered as a stage to legalize cryptocurrencies

The unregulated crypto market can be the barrier that prevents most institutions and financial corporations from dipping their feet in the crypto industry or forming partnerships with crypto exchanges. Hence, by widely implementing KYC, the barrier can be taken off.

Conclusion

In general, KYC requirements play an important role in boosting overall user acquisition on the exchange and provide investors with a secure and trusted platform to handle their transactions.  

Please feel free to contact us at support@tokenizexchange.zendesk.com if you have any questions or concerns, and we will be happy to help.

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