Today we will talk a little about security, and since our main activity is related to cryptocurrency, we will talk about KYC and AML
Cryptocurrency transparency is the quality that makes them and the blockchain truly unique.
To begin with, let's get back to the origins of how this happens:
A coin or token is born inside the blockchain, where a unique mathematical code is generated protected by an electronic signature - this is cryptographic encryption.
The blockchain of each individual cryptocurrency consists of transaction blocks that are sequentially interconnected during each transaction using a one-time electronic key. This ensures complete openness and at the same time openness for all participants. Since the blockchain of the main cryptocurrencies is transparent - the path of each coin can be traced from the stage of its creation up to the present moment, information about all transactions remains in the blockchain forever.
A coin with a suspicious transaction history, you most likely will not be able to sell on regulated exchanges, since “dirty” money is a risk for buyers and exchanges.
Two procedures come to the rescue here: KYC (know your customer) and AML (anti money laundering)
KYC is customer verification, identification and identity verification. In essence, KYC is used when someone tries to open an account or conduct a transaction.
The KYC process usually includes:
- Verification of identity (photo with passport);
- Verification of the address (some account with your address and name);
- User verification in illegal activities;
- Examination of the source of funds and destination;
- Search for illegal transactions or evaluate too large transactions.
(IMPORTANT: We ask our users only a photo with a photo with a document on which there is his photo, name and date of birth pto make sure that this is a real person and the sign “peace” to understand that the photo is addressed exactly to us, not bought)
With the help of KYC there is a screening of those who for any reason do not have the right to use the services.
Illegally obtained incomes are always trying to launder or convert into net assets. At some point, scammers began to understand how convenient the cryptocurrency world is for this.
The AML process includes:
- Search for large transactions;
- Coin movement control;
- Obtaining KYC information and checking whether a person has been noticed in suspicious actions.
Is all this necessary?
Compliance with these two procedures is extremely important by law in order to avoid fraud with money, and companies need to not become victims of fraud with bots, etc.
Such verification is also useful to users, as it significantly reduces the chance of theft of money, due to the fact that the verification process becomes much more difficult
“When there are no physical threats, then physical protection is not needed, but informational is always needed.” - N. Golduyev - Ensuring business information security
Fraudsters will always look for ways to trick the system and get a profit, but our task is to minimize the possibility of such a development of events, which is why we use the KYC system.