Cryptocurrency value might fluctuate either up or down depending on the market conditions. However, this industry does not seem to vanish and shows that it has come to stay. As the cryptocurrency domain is quite large, it has turned into a place of interest for money laundering activities. One of the popular ways to end such illegal practices is to conduct a KYC verification process. Let us dig in to learn more.
In a cryptocurrency exchange business, that too in a centralized exchange business. Get help creating a robust, secure, and reliable exchange platform using professional cryptocurrency exchange development services.
Cryptocurrency has been the hottest asset class on the market over the past few years. As a result of this, cryptocurrency exchanges are also emerging as some of the biggest gainers in the crypto space. One of the best ways to reap huge returns in the crypto market is by owning an exchange.
Crypto exchange development has the highest touchpoint for all the new crypto users and creates various revenue streams. It is also an exceptional way to bet on the crypto market.
We stand pioneer in developing cryptocurrency exchanges that facilitate secure and fast transactions. We are backed up by an experienced and enthusiastic team of blockchain developers who can build a reliable and highly customizable crypto exchange platform mainly focused on the revenue of your business.
Are you interested in finding a good business opportunity in the crypto space? You can do it with a crypto exchange development company.
Definition Of KYC
KYC plays an important role. Know Your Customer (KYC) is the process of collecting users’ information. Mainly, KYC helps avoid identity theft and forgeries in a company.
Financial institutions will initiate KYC whenever a new user creates an account, applies for a loan, makes investments, and does several other tasks. During these processes, the customer has to provide solid identity proof. Then, the exchange will conduct identity verification to ensure the authenticity of the user profile.
Benefits Of KYC In A Crypto Exchange
- Reduced Scams
The foremost goal of KYC is to eliminate scams and fraud in the network. Exchanges can achieve high scam-resistance systems by conducting robust identity verification.
- Enhanced Market Stability
Potential criminals can take advantage of the notoriously volatile nature of the crypto market. However, if identity verification through KYC is carried out in the initial stage, those criminals cannot manipulate the market. Thus, we can enable stability and can also improve the market value.
- Improved Trust & Transparency
First of all, when a user agrees to provide their personal information to an exchange, it represents their trust in the platform. Also, they will be willing to utilize the exchange’s service for a prolonged period.
- Prestige Damage Control
The type of exchange that performs KYC is a centralized exchange. Automatically the platform will be the custodian for the customers’ wallets. Therefore, when a criminal attempts a hack, the exchange platform will instantly freeze the funds and maintain its reputation.
KYC is a method designed to enhance the security of an exchange platform against terrorism financing, money laundering, and others. Even though it is not a completely safe method, it still remains a popular way to curb financial crimes.