1. What is KYC ?
KYC stands for “Know Your Customer”, meaning the term is very important in the business world. Finding out who your customers are, or KYC, is what businesses have to do to verify their customers’ identities before or during the start of business with them. In addition, the term KYC may also refer to specified banking practices, used to verify customer identities. Banking institutions, credit companies and insurance agencies require their customers to provide detailed information to ensure they are not involved in corruption, bribery or money laundering.
2.Rules in KYC
The Customer Understanding Code (KYC) is an ethical requirement for those working in the securities industry, who are dealing with clients in opening and maintaining accounts. There are two rules outlined in July 2012 that need to be implemented: Financial Industry Regulatory Authority (FINRA) Rule 2090 (Customer Understanding) and FINRA 2111 (Conformity). These rules apply to protect both the broker (Broker — Dealer) and the customer and for the broker (Broker) and the company to treat customers fairly. The customer understanding rule 2090 stipulates that all brokers — dearlers should use reasonable efforts when opening and maintaining customer accounts. It is important to understand and keep a record of each client’s essential data as well as determine authority to act on behalf of the customer. KYC rules are very important when starting a relationship with customers and brokers (Broker) to establish the necessary data for each customer before making any recommendations. The required data are those that are effective in servicing client accounts and should take care of any special handling instructions regarding the account. In addition, Broker-dealers need to know who will act on behalf of clients and Broker-dealers need to comply with all securities laws, regulations and rules.
3.The importance of KYC
Imagine, that a terrorist has just earned 1 million dollars in cash after a bombing in Afghanistan. He wants to transfer 200k USD to her girlfriend who is trading weapons in Africa.
Of course these two objects are extremists, they are wanted and the bank account is blocked. He figured out a way to convert this $ 1 million into Bitcoin to transfer it, an anonymous blockchain, and nobody knew who he was in these transactions.
4.How dark does KYC Succeed?
Below, I will list the documents needed to conduct KYC:
Identity card (ID) or Passport (Passport)
Driver’s license (many projects allow to use the driving license instead of the passport or ID card)
Proof of residence of the brothers is valid within 3 months. They can be utility bills, TV bills, etc. as long as they have your address.
Income declaration. That is, ask you to show documents to prove where your income comes from. This is to ensure that you do not use “dirty money” for the ICO or exchange. (Depending on whether the ICO project / exchange requires or not)
The United States, South Korea, the United Kingdom and the European Union have also integrated the KYC and AML processes into their cryptocurrency systems. They are the leading countries in applying and promulgating laws and regulations for Blockchain and Cryptocurrency.