The Emerging Role Of KYC And AML In Cryptocurrencies

1. The Emerging Role Of KYC And AML In Cryptocurrencies Cryptocurrencies have had a thoroughly disruptive effect on the financial sector. A day barely seems to pass without a new crypto-related topic hitting the news. However, critics of the system have long suggested that it supports criminal and illicit activities. That’s why, since mid-2017, governments have increasingly sought to regulate the cryptocurrency market. Such efforts largely focus on KYC and AML regulations – but what do these acronyms mean? Introducing KYC and AML KYC refers to ‘Know Your Customer’. It concerns the practice of obtaining relevant identifying information about a service’s customers. KYC solutions often require customers to supply appropriate identification documents such as photo IDs, bank accounts, utility bills, residential address and credit card information. The main purpose of KYC Solutions is to prevent unqualified people using a service that they are not authorised to use. Examples of such people could include minors, undocumented immigrants and people with criminal histories.

2. Meanwhile, AML means ‘Anti-Money Laundering’. The term covers various regulations that aim to prevent income generation via illicit and illegal transactions. The development of the mainstream financial ecosystem in recent years has seen various checks and balances introduced to assist in the prevention of money laundering. How Do These Practices Relate To Cryptocurrency? KYC and AML rules are both playing key roles in the regulation of the cryptocurrency market today. However, such rules also go against the principle of anonymity that is one of the big reasons for many people’s attraction to cryptocurrency in the first place. The supposedly anonymous and untraceable nature of cryptocurrency transactions worries regulators, which have voiced concerns about criminals potentially taking advantage of such a system. The use of money laundering for terrorist funding, for example, could be catastrophic for a country’s financial and territorial security. This is why governments in some countries are trying to clamp down on the cryptocurrency market. The approach is not identical from one country to the next, but the overarching aim is the same: to remove the cloak of anonymity that cryptocurrency transactions provide. It means that strict rules now exist on many cryptocurrency exchange platforms about account verification, for instance, as many governments begin to outlaw anonymous trading accounts. Countries are also introducing related AML laws. However, the effectiveness of such rules depends on service providers being willing to give timely information about suspicious activities. South Korea, the United Kingdom, the United States and the European Union are among the territories that are constructing cryptocurrency regulatory frameworks with KYC AML rules at the forefront. To learn more about our own KYC solutions here at SmilePass, Simply Contact Our Team Now. For More Information Please Visit Our Website: https://smile-pass.com/