Cryptocurrencies are increasing day by day with new coin launchings. The market is highly effective in trading new currencies of coins that are getting their stakes high each week. People are investing in the crypto market to get the most of the profits with new currencies. As the market is so full of revenues the attackers are always looking to make illegal money by exploiting the crypto trading system. They use modern tools to get the user information for getting their hands on the crypto accounts. The market has face issues relate to scams which increase the money laundering attempts in the digital market. So KYC bitcoin solve this issue.
According to research, the crypto industry face digital scams and thefts of more than $14 billion from eliciting crypto transactions in the year 2021. This marks the hefty increase in the number of frauds from the previous year of 2020 which was record at $7.8 billion. With this major stride in money laundering using cryptocurrency platforms. The difference is 79% more than the previous year which is an alarming situation for the cryptocurrency market.
Leading the cryptocurrency market bitcoin is the most expensive and efficient currency. That most users are looking to get their hands on for huge profits. Scammers target the bitcoin market to make the highest possible profit on cheating trade between crypto users.
KYC Regulations to Protect the Crypto Trade
The KYC (Know Your Customer) compliance is the bedrock of almost all money laundering and financial terrorism compliances such as AML/CFT. Talking about the cryptocurrency market the KYC compliance is tougher to implement than the usual financial institutions. Digital crypto transactions are more likely to involve high numbers of identity verification checks to ensure the crypto market is secure. E-KYC verification is conducted to get the details of transactions and the associated risks between them. The KYC regulations or KYC bitcoin in terms of cryptocurrency are as follows:
Risk-Based Compliance:
Risk is identify amongst the user transactions for a better evaluation of the possible attempt of crypto fraud. The transaction is analyse after which the AML/CFT compliance is impose to validate the transactions in terms of preventing money laundering and financial terrors. With risk-base compliance, the users can deploy their crypto exchanges efficiently with minimum risks involved for scamming and theft.
The risk-base compliance follows several checks to gather user data for further evaluation of events and future processes. The checks are digital KYC checks or KYC bitcoin use to eliminate digital threats.
Identity Verification:
Likewise, in the traditional identity verification checks the user is request to verify their identity by digital means. This process helps in building accurate digital user profiles for a secure interchange between cryptocurrencies, especially bitcoin.
Customer Monitoring:
Customers are monitored to develop a user interaction pattern online. This helps in regulating the user interactions with the system of trading and prevents scams by identifying unusual interactions. The customer transactions are monitored, and their type of trading methods and other elements of the crypto market such as coins and currencies are analyse.
Customer Screening
Customer screening is a part of KYC bitcoin compliance to gather information about the user status. It verifies the PEP (Politically exposed persons) that may increase the risk of money laundering via cryptocurrency.
Risks Involved in Cryptocurrency Exchanges
There are several major risks involved in the cryptocurrency trading network which can impact the whole market if not evaluated properly. The fraudsters always find these loopholes to breach the system. The KYC AML regulations are followed to minimize these risks. Some of the risks are discussed in this blog. Document verification service are also use for this purpose.
Anonymous Transactions
Anonymous identities are always used by scammers to exploit every online transaction system. The anonymity is eradicated by proper KYC solution implementation which results in the protection of the community.
Speed of Crypto Transaction Processing
The network of crypto trading is so quick that the transactions are processed in a matter of seconds. The attackers always look to these gateways of transaction rates that outpace the controls imposed by the AML/CFT regulations. Exchanges must implement their own anti-money laundering solutions to get rid of these issues.
Conclusion
The KYC compliance or KYC bitcoin is in power for most financial proceedings, the cryptocurrency market is also complied with the KYC regulations to stop the increase in frauds of cryptocurrency. KYC for Bitcoin is a major check before any trading process of the currency as it is the most demanding one. KYC checks or KYC bitcoin are regulated from time to time for proper identification of the users to rule out scammers from the crypto network.
