What is KYC: Meaning, Process, and Advantages

WhiteBIT
Published 09 October 2021
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What is KYC: Meaning, Process, and Advantages

Content

To ensure the security of financial transactions and combat fraud and money laundering, a need to abandon the complete anonymity of users occurred. That is why most cryptocurrency exchanges have a standard procedure – KYC verification. In this article, we will tell you about KYC’s meaning, what its benefits are, and how to pass KYC on WhiteBIT.

KYC verification: what does it stand for?

Many crypto traders facing this term wonder: “What does KYC mean?”. Well, let us explain. KYC is the verification of a user, the confirmation of their identity by requesting personal data. It is the abbreviation for “Know Your Customer” or “Know Your Client”. The difference between Due Diligence and KYC is that the first one checks if the information provided by customers during registration is correct and does not collect data.

Although the KYC definition is unified, there are no international KYC regulations. The USA, UK, Germany, and so on have different verification standards. Cryptocurrency exchanges also have different KYC requirements, verification duration, and benefits that the client receives.

Many users do not want to provide information about themselves, taking care of the security of confidential data. Still, it is worth remembering that online verification indicates the exchange’s reliability. The platform that does not require any data is not liable to you. If you visit a crypto exchange with no KYC required and hope to buy Bitcoin without KYC, take responsibility for possible risks.

What are the advantages of KYC?

Client verification is a mutually beneficial procedure for a centralized platform and traders. Therefore, there are advantages for both parties. The exchange receives information about customers, their risk profile, and financial position. Instead, customers receive enhanced protection of their account and a set of features that are not available to users who have not passed verification.

Passing KYC on WhiteBIT will bring users the following benefits:

  • an increase of the withdrawal limit to 100 BTC per day (for comparison, unverified users can only withdraw up to 2 BTC daily);
  • the ability to withdraw fiat currencies;
  • account recovery in case of losing one’s 2FA code.

In addition, the Know Your Customer principle minimizes the risk of theft and helps establish the “purity” of suspicious transactions.

Speaking of KYC’s pros and cons, it is hard to name the drawbacks. The only disadvantage of verification is the loss of anonymity, which is so valued by members of the crypto community because it is one of the main features of cryptocurrency. However, if you have nothing to hide, do not be afraid of KYC. It is up to you to choose between security and anonymity.

Speaking of exchanges, they will face additional costs for employees, their training, specialized software, and security of KYC documents.

KYC and AML compliance

AML, Anti-Money Laundering, is part of the policy of any self-respecting exchange and is of great importance for the security of the finances. The name itself suggests that AML is a set of measures and laws to combat money laundering. This category includes funds received from drug trafficking, child exploitation, the creation of weapons of mass destruction, and so on. AML is also closely related to Counter-Terrorist Financing, CFT.

Due to the anonymity of cryptocurrency transactions, the digital asset market has become an attractive environment for money laundering. It plays into the hands of attackers and harms honest users, tarnishing the reputation of crypto. Therefore, there is a need for AML and KYC.

AML connects the KYC database and other sources of information to analyze transactions, identify suspicious actions and verify them by comparing data on verified users and addresses in the blockchain. Thus, after people start mass passing KYC, crypto will be safer because it will be easier to track “dirty BTC” and punish the guilty. So, never underestimate the KYC verification meaning for safety and security.

KYC process on WhiteBIT

Once we have answered the question: “What is KYC in cryptocurrency?”, it is time to discuss how to pass KYC online on our exchange. First, pay attention to the list of countries whose citizens and residents are not allowed to pass verification on WhiteBIT. If all goes well, feel free to follow the instructions listed below.

User verification consists of a few simple steps that take no more than ten minutes.

  1. Sign in to your WhiteBIT account and go to the Verification tab in settings.
  2. Fill out the form without missing the required fields and enter accurate data from your documents.
  3. Upload a clear photo of one of the documents that prove your identity. It can be your passport, international passport, ID card, or driver’s license. The picture cannot be cropped or edited.
  4. Take a selfie with your document and a sheet of paper with handwritten “WhiteBIT.com” and the current date verification.
  5. Wait for the document check to complete. Once your application has been processed, you will receive a letter via e-mail notifying you of the results of the KYC check. Your status in the Verification section will change upon successful completion. If your application is rejected, the letter will also state the reason.

Checking a client can take from 1 to 24 hours but often takes less than an hour. If you made mistakes while filling out the form or sending documents – do not worry. You can always try sending your application again.

The users from Ukraine can pass simplified verification, which includes only filling out the form and uploading a photo of the document. They also can pass quick verification via the state Diia portal.

KYC procedure in Ukraine: quick verification via Diia

Diia is a Ukrainian state portal with which you can get 72 government services online, and the mobile application can give you access to 13 of your digital documents and 15 services.

Since all the documents required for verification are stored on this portal, the user only needs to give the exchange access to them. Select “Quick verification with Diia” in the Verification tab, go to the Diia app or scan the QR code and confirm the transfer of documents.

It is the first cooperation of its kind between the cryptocurrency exchange and the online portal of public services, which will make the KYC process even easier, faster, and more reliable.

Conclusion

KYC verification is an essential element of any reliable cryptocurrency exchange, which benefits both the platform and its users, protects traders’ assets, and prevents criminal money laundering. Getting verified deprives users of complete anonymity but gives the privileges of a verified account instead. Complete KYC now and enjoy even more secure trading!

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FAQ

What does KYC stand for in crypto?
KYC stands for "Know Your Customer", which means the procedure of verifying the user's identity. KYC, meaning crypto exchange’s online check is present on most trading platforms, is often optional but gives users many benefits.
The answer to why KYC is required
User verification is vital in the fight against money laundering. It provides additional protection for accounts and expands the opportunities for traders (for example, when withdrawing a large amount of crypto, KYC can be required). After passing KYC on WhiteBIT, you will be able to withdraw fiat currency, and the daily withdrawal limit will be increased to 100 BTC. You will also be able to restore your account if you lose your 2FA code.
What is KYC AML?
KYC and AML are two different terms that are closely related and can often be seen side by side. AML (Anti-Money Laundering) is a set of measures to combat the laundering of money obtained illegally. KYC is part of AML. If there are doubts about the “purity” of your transactions, AML with Know Your Customer checks will prove that these are your honestly acquired assets. That is why KYC is necessary.