Knowing your customer is not as popular in the cryptocurrency community as it is in other industries. Many stakeholders and individual merchants do not like the idea of sharing their data, which is the essential requirement of knowing your customer. Traditional ways of practicing it were so hectic and also they did not guarantee the authenticity of the results. However, with the emergence of technology and as the digital trends prevailed, digital KYC became the key to making the process faster and ensuring the authenticity of results. Bitcoin is an emerging digital currency and requires the identification process to deter fraud. KYC bitcoin is not yet practiced entirely which makes the industry prone to multiple fraudulent activities. Employing it depends upon various factors as global rules fluctuate with the market’s objectives. Hence, the e-KYC is powered by intelligent technologies that make it competent enough to counter scams. It is not only helpful in combating fraud, but it is also significant in securing the customer’s digital currency.
Inadequate Safety Protocols and Cryptocurrency Scams
Like any other business, the crypto industry is a victim of fraud and scams. Unfortunately, fraudulent activities are increasing like diseases in the cryptocurrency industry. With more than 80,000 scams recorded last year in the US alone, the market is prone to fraudsters’ tricks. Because cryptocurrency transactions are carried out independently digitally, no one knows the other person they will deal with. The internet’s involvement in doing trading makes it relatively easy to commit fraud. With the proximity of insufficient security methods and vulnerabilities prevalent in bitcoin, individuals are encountering financial troubles around the globe.
Traditional ways of practicing it were so hectic and also they did not guarantee the authenticity of the results. However, with the emergence of technology and as digital trends prevailed, digital KYC crypto became the key to making the process faster and ensuring the authenticity of results. Bitcoin is an emerging digital currency and requires the identification process to deter fraud.
KYC bitcoin is not yet practiced entirely which makes the industry prone to multiple fraudulent activities. Employing it depends upon various factors as global rules fluctuate with the market’s objectives. Hence, the e-KYC is powered by intelligent technologies that make it competent enough to counter scams. It is not only helpful in combating fraud, but it is also significant in securing the customer’s digital currency.
Types of scams
-
Online media fraud
Social media is one of the dominant platforms and possesses a considerable following. Cryptocurrency clarity on multiple social platforms is of great appeal amongst people. Unfortunately, wicked bots are expanding extensively throughout social media, producing fake cryptocurrency offers with encouraging outcomes. Unfortunately, the customers get into the trap by the imposters and ultimately suffer financial trouble.
-
Non-Fungible Tokens Fraud
The fraudsters employ the genuine hashcodes of the coin to sell or trade them with the actual cryptocurrency bitcoins, therefore, KYC bitcoin is essential to stop such fraud in the industry.
-
Malware Attacks
Traditional strategies and techniques which are employed to breach digital wallets can be pretty hectic. Therefore, to make the customers’ wallets secure and unbreachable, hackers have deployed current strategies to instill viruses on victims’ systems and perform malware attacks to hack the systems.
-
False Bitcoin Offering
Illegal issuance of ICO is the most prevalent scam, and this state is bothering the crypto investors. Only in 2017, the rate of this fraud increase up to 80%, and about $6 million worth of cryptocurrency was stolen from the customers.
KYC Bitcoin- Regulatory Landscape
While crypto transactions are becoming popular with time, compliance professionals are promoting their reach to grab crypto markets and implement stringent KYC/AML regulations. In addition, the application will employ identity verification and combat scams in all financial institutions.
Realizing the importance of KYC bitcoin, the European Union’s designed its digital finance package in 2020 that encompassed online financial improvement and appeared to direct a digital market. The online market strives to incorporate blockchain, bitcoin, AI, AML, and CTF.
It is crucial to notice that the USA is a prominent name for designing know your customer compliance online. This is because the crypto-crypto exchanges do not come under the liability to be recorded for complete transactions. However, if there is a crypto-FIAT or vice versa, then KYC anti-money laundering measures are significant.
KYC Bitcoin – Becoming a Need
- Cryptocurrency companies are joining their method with an e-KYC solution to give their customers the farthest sense of genius.
- Currency markets are now denying crypto coins and plans that are not governed by laws.
- Digital plans like ICOs that are genuinely built on the fundamental theories of the know your customer measure have a higher possibility of gaining global recognition as they seem to be legal, and customers could trust blindly.
- Some of the crypto exchanges and providers tend to show unbothered behavior. They don’t understand the significance of laws that ultimately lead them to financial troubles and heavy penalties forced by the governors.
- While crypto transactions are becoming popular with time, compliance professionals are promoting their reach to grab crypto markets and implement stringent KYC Compliance. In addition, the application will employ identity verification and combat scams in all financial institutions.
- Realizing the importance of KYC bitcoin, the European Union’s designed its digital finance package in 2020 that encompassed online financial improvement and appeared to direct a digital market. The online market strives to incorporate blockchain, bitcoin, AI, AML, and CTF.
- It is crucial to notice that the USA is a prominent name for designing know your customer compliance online. This is because the crypto-crypto exchanges do not come under the liability to be recorded for complete transactions. However, if there is a crypto-FIAT or vice versa, then KYC anti-money laundering measures are significant.
EndNote
Since the arrival of cryptocurrency, especially as bitcoin emerged, it has earned popularity within no time. Unfortunately, because of the anonymity factor and high-interest returns, imposters are designing multiple fraudulent schemes to exploit the crypto investors to obtain capital. To stop such fraudulent activities, KYC bitcoin is playing its part in counter scams and verifying clients before onboarding them. It is the only way to win the trust of people in the crypto market.
