October 22, 2020

Introduction KYC – A Protective Mechanism

When it comes to using online financial services, integrity and transparency are of the utmost importance. Fraudulent transactions and identity theft represent a major security threat for financial service providers and their customers. This is where Know-Your-Customer (KYC)/Know-Your-Business (KYB) comes into play.

In this article we are going to discuss what KYC/KYB is, why it matters, and how you as a customer benefit from the KYC process at Blocktrade.

What is KYC/KYB?

KYC, know-your-customer, and KYB, know-your-business, describe the need and necessity for banks and financial service providers (like banks, online brokers, digital asset exchanges,…) to verify the identity of their customers and gather some basic information about them.

KYC/KYB are frequently mentioned in combination with AML – Anti-Money-Laundering – which refers to a broader set of principles and measures companies must implement to prevent money-laundering practices through usage of their services.

The exact requirements for KYC/KYB and AML are defined in the USA Patriot Act of 2001 (for US companies) and the EU Directive 2018/843 (“AML-Directive V”).

Why does KYC/KYB matter?

KYC/KYB requires customers to submit certain documents to financial service providers. Yes, this takes a few minutes and can be cumbersome, yet it’s well worth it.

These few minutes ensure that you can safely use the company’s services while having full trust that your identity and assets are protected. Without a KYC procedure in place…

  • hackers could use compromised user credentials to withdraw client funds or transfer them to their own account
  • criminals could use financial service providers for money laundering or terrorist financing
  • criminals could open bank or trading accounts in somebody else’s name and abuse this identity theft for their own personal benefit

Conclusion

KYC and KYB procedures are an essential process when registering for financial service providers. While businesses implement these procedures to ensure legal compliance, customers benefit by staying secure and legitimate and knowing their assets are protected.

January 11, 2022

How risk averse are you?

Financial investments always bring a certain level of risk. How much risk can you comfortably take? This is described by your risk appetite, which is different and individual for everyone. How much financial risk we can comfortably take depends on a variety of factors such as our financial situation, personal income, investment experience, market insight […]

December 21, 2021

The anatomy of a Digital Assets Exchange: The Fiat-Gateway

To exchange fiat currency for cryptocurrency, you need an exchange with a fiat gateway. This gateway allows you to deposit fiat currency through bank transfer, credit/debit card payment or wallets.   What is “fiat” or “fiat currency”?  A fiat currency is a government-issued currency whose value is not tied to any physical commodity like gold […]

December 10, 2021

Trading 101: A beginner’s guide – How to Trade Crypto

Welcome to the third and final part of the introductory series “Trading 101”. After covering the nitty-gritty, basic concepts and questions traders must ask themselves in part 1, and describing the five major types of cryptocurrencies and what cryptocurrencies to trade with in part 2, in part 3 we will discuss how to actually start trading cryptocurrencies.  Putting all of the pieces together, here is the exact guide to follow to […]