Garient Evans, Décadence President of Identity Solutions, Trulioo explains what are the most perceptible KYC requirements for a cryptocurrency exchange and offers tips on how to meet them
There is no denying the size and scale of the cryptocurrency economy or the interest it attracts from regulators. according to Report from Reuters As of May this year, there are 18,142 cryptocurrencies, 460 crypto exchanges, and market cap of cryptocurrencies regularly exceeds 1 trillion US dollars. Data changes daily, but as of mid-August 2022, the average 24-hour trading ouvrage for all cryptocurrencies globally has reached 66.7 billion US dollars.
Regulators who want fair and secure markets free from money laundering and other financial faute are well aware of this massive amount of activity.
tempérant leads the organization
Along with the United States, the United Kingdom and the European Incorporation are leading the way globally in implementing cryptocurrency regulations.
Recently, European Incorporation institutions announced an agreement on two key parts of the regulations: the Market Crypto Assets Act (MiCA), which regulates most crypto faveur providers, and an anti-money laundering logiciel that mandates robust verifications for crypto transfers. Earlier this year, British Chancellor of the Exchequer Rishi Sunak lourd out a proposition to make the UK A commun hub for crypto-asset technology. In July, UK Financial Services and Markets Bill It was published and included a stock to regulate crypto-assets and stablecoins for the first time.
We are seeing similar movements elsewhere. Create the World Economic Symposium Cryptocurrency Governance Consortiuma group of more than 80 organizations representing many sectors and geographies, also intended, in portion, to provide interrogation on approaches to regulating cryptocurrencies.
Exchanges need KYC
While each jurisdiction has different philosophies, models, processes, capabilities, and biases regarding cryptocurrencies, the foyer of the regulators is quite clear. They want to protect consumers from scammers and illegal companies. They also want to mitigate the use of cryptocurrencies in facilitating nefarious activities such as terrorist financing, criminal enterprise financing, money laundering, and sanctioning circumvention. They want to establish the same normes of due assiduité required for traditional financial tâches.
The requirement for cryptocurrency exchanges to have a clear understanding of who their customers are underscores the proportion of having a fit-for-purpose Know Your Customer (KYC) program. This builds cumul and privacy, two key components of cryptocurrency exchanges that hope to expand to reach more consumers while complying with regulations. Exchanges must ensure that KYC and crypto compliance procedures are secure, robust and defensible while protecting the privacy of their customers.
Laying a strong foundation for exchanges
Résidence a reliable ecosystem begins with equipping compliance teams with systems that can quickly adapt to changing regulations and scale to meet the growing demand from oecuménique investors. It also means putting in ardeur strong security measures to keep hackers out and protect customers’ personal interrogation.
Finding the right bascule between strong security and a low-friction setup is key to providing the experience customers expect when they interact with cryptocurrency exchanges. Complex procedures and énorme waiting times for approvals can lead to clients leaving for a different currency exchange.
Simplified, low-friction Binaire Identity Verification (IDV) can be the cornerstone of an encrypted KYC process. IDV can help align exchanges with privacy and security regulations and enhance brûler révélation that their data will be protected.
In fact, many European countries have already implemented IDV requirements. In the Netherlands, customers must verify the ownership of their crypto wallet and describe their intended use of the cryptocurrency. Users in Switzerland must prove their ownership of non-holding wallets with verified commentaires. In France, anonymous accounts are banned.
The steady pace of new and revised regulations only increases the proportion of cryptocurrency exchanges in finding reliable IDV partners.
The remaining strength of KYC
KYC for cryptocurrency exchanges is here to stay. Regulatory involvement is increasing worldwide as the ouvrage and speed of cryptocurrency transactions increases.
Élastique IDV solutions with large oecuménique coverage, enhanced élimer experiences, fast results and strong security can terrain cryptocurrency exchanges to meet current KYC requirements and soumission a competitive advantage in an ever-evolving market.
Emboîture Garnet Evans
Garient Evans brings over 20 years of experience and estimation in credit, identity, fraud, fait verification and compliance to Trulioo. Previously he held senior positions at Mitek and Socure as well as ID Analytics where he was involved in the release of the industry’s first identity fraud detection finding combining apparat learning and PII.
trullyoo The commun champion in identity verification, providing real-time verification to 5 billion consumers and 330 million bizness entities worldwide – all through a single API integration. Organizations rely on their identity verification platform, GlobalGateway, to help meet bizness and compliance requirements and ordinateur due assiduité and fraud prevention workflows.