Identity verification or KYC is designed to protect users’ accounts against the misuse of financial accounts such as fraud, corruption, money laundering, and more. See how KYC allows you to trade crypto on Binance with more confidence and security.
Apart from verifying a customer’s identity, it’s also important to confirm their location and address. Your identity documents will provide basic information like your name and date of birth, but more is needed to establish your tax residence, for example. You will likely need to complete more than one stage of KYC. Financial service providers often need to re-verify the identity of their customers at regular intervals too.
1. Blockchain transactions are irreversible. There is no admin to help if you make a mistake, meaning that funds can be stolen or moved and not be retrieved.crypto wallet3. Regulation is still uncertain when it comes to taxes and the legality of crypto in many countries. Although KYC increases the time needed to set up an account, it has clear benefits. The average customer won’t necessarily be able to see them, but KYC has a significant impact on keeping your funds safe and combating crime.The benefits of KYC aren’t all obvious. However, it does much more than just combat fraud and can improve the financial system as a whole:
1. Lenders can more easily assess their risk by establishing a customer’s identity and financial history. This process leads to more responsible lending and risk management.3. It reduces the risk of money laundering from occurring in the first place as a proactive measure. 4. It improves the trust, security, and accountability of financial service providers. This reputation has a knock-on effect on the financial industry as a whole and can encourage investment.
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