What is KYC and Why Does It Matter? 4 1173

After a hair-raising 2017 with scores of ICOs raising millions of bucks overnight, the morning after is hitting hard. In the cold light of day, many a prospect that seemed so attractive suddenly looks rather plain–or worse–they’ve run off with your money. Investing in ICOs isn’t for the faint-hearted. We all know there are a few crypto investors out there on their yachts, but there are plenty more licking their wounds at home. So how can KYC help? 

While the crypto landscape still remains for the most part, lawless, and regulation scarce, there are some ways that respectable ICOs can help rebuild investor confidence. One of them is by carrying out KYC (Know Your Customer) processes on their investors. In fact, KYC, rather than just a good idea, is becoming a prerequisite of doing business. Let’s check it out.

What is KYC?

Know your customer (KYC) is where a business verifies the identity of their clients. This may be by requesting proof of address, or government ID documents. Many ICO investors are now being asked to upload a photograph of themselves holding their document, so as to prove that it hasn’t been stolen and isn’t fake.

KYC is often also referred to when anti-money laundering (AML) regulations are enforced. Many different entities carry out KYC practices not only on their customers, but their employees and other stakeholders as well.

Why Does it Matter?

After all the high profile scandals, hacking attempts and scam teams, legitimate ICOs who want to repair their images should start to get serious about self regulation. It is a simple, yet meaningful way of demonstrating your company’s legitimacy. And here are five other reasons why KYC is so important, besides:

1. If you’re operating in the US in particular, KYC had better be high on your radar. Why? Because the SEC will be hot on your heels if it isn’t. With tougher regulation on the very near horizon, there have already been some cases where the SEC has demanded refunds on token sales that have not implemented these processes. Don’t think it’s that important? Just ask Protostarr; they’ll tell you.

2. If you don’t implement KYC you may not be able to get on the most reputable cryptocurrency exchanges. So, not running checks in the short term could hurt your potential profits in the long run. In fact, Bitcoin exchange, GDAX, that’s backed by the New York Stock Exchange, only lists a fraction of the thousands of tokens out there.

3. Know your customer gives you credibility. It will also allow you to meet banking and regulatory compliance as a precursor to anti-money laundering requirements.

4. You’ll be able to reach a larger audience. Not all jurisdictions require KYC, but the number is steadily growing and there are many places with a lot of investors that already require it. America, Britain, and Canada, to name a few.

5. Remember that the US dollar is still the world’s reserve fiat currency. Even banks outside of the USA are following their lead when it comes to crypto regulations, and violating US rules for global banks isn’t an option.

Complying with KYC voluntarily gives you many advantages and it benefits your customers as well. It may feel like an extra layer or a tightening of freedom, but if you’re serious about attracting investors who are rightly concerned about their money, KYC is a logical step.

Previous ArticleNext Article
Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.

4 Comments

  1. Hello, Neat post. There is an issue together with your website in web explorer, could check this?
    IE nonetheless is the market leader and a
    large component of other folks will pass over your excellent writing due to this problem.

  2. After going over a handful of the articles on your website,
    I honestly like your way of blogging. I book-marked it to my
    bookmark site list and will be checking back soon. Please visit my web site too and let me
    know how you feel.

  3. This design is incredible! You most certainly know how to
    keep a reader entertained. Between your wit and your videos, I was almost
    moved to start my own blog (well, almost…HaHa!) Wonderful job.
    I really enjoyed what you had to say, and more than that,
    how you presented it. Too cool!

The Bitcoin Bull Run: How It Started, How It’s Going Comments Off on The Bitcoin Bull Run: How It Started, How It’s Going 995

Wherever you stand on Bitcoin, there is no question about its impact on the role of blockchain and cryptocurrency within society.  Whether we look back to Pizza Day or to its heights in 2018, the volatile nature of the cryptocurrency has garnered much speculation and media coverage. 

While many looked at the past few years as a “Crypto Winter,” others saw an opportunity for Bitcoin.  Between COVID lockdowns, political, and fiat currency concerns, Bitcoin has been on a dream run – for a moment going over the $55,000 barrier.

Why Did Bitcoin Suddenly Explode (Again)?

Elon Musk and other influencers played a role in the recent rise in Bitcoin’s price. Tesla’s recent investment in an infrastructure to accept Bitcoin payments, and Apple Pay’s introduction of BitPay, a prepaid bitcoin MasterCard, are also major markers of market adoption. But two other events occurred that set the stage for the Bitcoin bull run: a pandemic and Bitcoin Halving.

Every four years, Bitcoin miners have their processing transactions cut in half. This reduction in supply then drives up prices based on scarcity. This occured in May 2020, when the economy was already at a standstill due to the pandemic. Since the supply of crypto coins is finite many think that there is lower inflation risk with using them – this means that it may be used as a hedge against U.S. inflation. In 2020, more than 20% of all dollars currently in circulation were printed, making crypto even more alluring. 

Crypto isn’t going anywhere. This year, experts project increased use of crypto cards, emergence of new cases, and increased investing from traditional finance leaders.

Take a look at this visual deep dive on the rise of Bitcoin for more information:

Bitcoin: Once A Diamond In The Rough, Now A Treasure

This New Blockchain Phone Has a Built In Cold Wallet 3 3103

The blockchain phone you didn’t know you needed has arrived. As phones have transformed into mobile devices they’ve absorbed tasks previously delegated to desktop computers, cameras, globes, flashlights, alarm clocks, and your Sony Walkman. Now you can add crypto wallets to the mix.

Digital Trends gave us the scoop on the Finney, the new phone by London-based mobile security specialists Sirin Labs. It includes a cold storage (fancy term for ‘offline’) wallet, a built-in token conversion service for smooth transactions, and a DApp center. They designed the phone to be the premier mobile “for crypto experts and novices alike,” according to their website.

It’s timely, as crypto is still trying to break through the membrane into mainstream adoption, and mobile could be the vehicle to make it happen. The Finney itself, though, may not make the crossover.

First, Some Tech Specs

Finney’s standout feature is a second screen hidden behind the top edge of the phone. The screen is actually a separate set of hardware altogether—the cold wallet itself. When it’s tucked into place, it’s disconnected and unhackable. Only when you slide the screen open does it go live so you can execute a transaction.

The phone’s software, SirinOS, is Android 8.1 modified for security and certified by Google. It runs on a Qualcomm Snapdragon 845 processor, with 128 gigs of storage and 6 gigs of RAM. It has a body of metal and Gorilla Glass, a 12 megapixel camera on the back, along with a fingerprint sensor. The Finney also features an Intrusion Prevention System (IPS) for an added layer of security.

Having the wallet placed at the top means the camera and fingerprint scanner are lower on the phone’s body than on previous models. See for example Sirin’s first phone, the Solarin, a security-obsessed $14,000 non-blockchain luxury mobile, which came complete with Italian leather backing and had a camera and fingerprint scanner where you’d expect them. On the Finney, the fingerprint scanner is too far down for effortless use. It invites slip ups where you press the camera lens instead.

The Finney is Nice, But It Will Take More to Mainstreamize Crypto

“It makes sending, receiving and converting cryptocurrencies securely on a smartphone surprisingly easy,” says one Digital Trends review of the Finney. But they qualify that ‘easy’ is relative, and the Finney is actually more of “a niche device for those who really are invested in cryptocurrency.”

Senior Writer Andy Boxall was less impressed. “The problem is its main feature,” that is, the cold wallet, “is only compelling to those who use, understand, and believe in cryptocurrency and the Blockchain.” For those who don’t already understand the ins and outs of crypto, it won’t be much of an advantage.

“Do not expect the Finney phone to make this baffling world [of crypto] much less confusing and problematic,” says Boxall. He describes the setup process as requiring trust in a bunch of companies you’ve never heard of, as well as the navigation of unfamiliar technologies and products. And for all the effort, he says, there’s little benefit for the crypto newcomer or ordinary mobile user.

“I carried on with the process because it’s my job,” says Boxall, “but if it wasn’t, I may have given up a lot sooner.” While the Finney hits many of the marks it aims for as far as design and functionality, simplifying the crypto process for novices doesn’t seem to be coming together with this phone.

“Living with the Finney has made it very clear that cryptocurrency is not ready for mainstream use yet,” says Boxall.

Get Your Finney If You Can

Sirin first released the Finney for sale only in exchange for their native SRN token. It went on the mainstream market in January so you can now purchase it with Paypal or, if you’re Gordon Gekko, a credit card. One final and important caveat: the company ships from their UK headquarters to 143 countries, but alas, the US isn’t one of them.

If you’re looking for a way to store your crypto securely and portably, make smooth crypto transactions on the go, or inspire jealousy in your American blockchain friends, the Finney may well be worth its $1,000 price tag. If you’re a newbie who’s interested in learning the ins and outs of crypto, there are better places to start.

Most Popular Topics

Editor Picks