Why is identity verification important?

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By Oleh Vasylenko

updated 5 months ago

Some Orderbook features require you to provide us with identity information. This includes certain transfers of cryptocurrency and/or Fiat. By submitting your info, you verify that it is accurate and authentic. You also agree to update Orderbook, should any information change. We call this process KYC (Know-Your-Customer).

Why is KYC so essential for financial operations?

1. To prevent money laundering

Money laundering makes illegally obtained funds appear legitimate. It is often the activating lever for Tax evasion, smuggling, financial fraud, and corruption. KYC guidelines differ by country. However, stringent rules guide the mechanism no matter where you are. This is the case for all organizations interacting with finance. Not performing KYC will often land companies in serious legal trouble. It can lead to fines, and even jail time for employees. 

The Financial Task Force (FATF) formed in response to mounting money laundering concerns. It officially formed at the G-7 Summit in Paris, 1989.

Financial institutions and regulated companies must implement KYC by law.

2. To Combat Finance of Terrorism

KYC helps organizations learn about users' financial dealings. It also helps verify any suspicious monetary transactions. We need this info to track the financing of terrorist activities.

3. To check Identity Theft

Valid identity documents are mandatory. No business will allow you to perform financial transactions without them. For account recovery, you must prove you are the verified person. This helps us to monitor and prevent identity theft.

Please note:

The person in your verified documents is the owner of your money. We insist that you only provide documents owned by you.

4. To judge the appropriateness of purchases made by the customer 

Judging the appropriateness of each customer's purchases is important. Likewise, communications to/with each customer are also important. For example, a customer may indicate they have a low risk tolerance. In such a case, we would not allow them to participate in high risk projects.

KYC regulations are local and differ from country-to-country. Jurisdiction is also on a country-to-country basis.

To learn more about your specific country, visit: http://kycmap.com.

KYC's legal infrastructure helps to prevent fraud and terrorism. The SEC strongly advises customers to only utilize compliant services.

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