In general, the "Know your customer" procedure is a concept that comes from banking and stock trading, the world of finance. It means that any company that works with private funds must identify the counterparty and establish their identity before making a financial transaction.
The initial supply of coins is a relatively new phenomenon in the world of finance, with the help of developers who launch new cryptocurrency projects and raise funds for their creation and development. In 2017, for example, through ICO, several teams raised a total of more than 6 billion dollars (according to ICOData). These high revolutions can not fail to attract the attention of state regulators around the world. As we have already mentioned, financial institutions verify customers whose funds they manipulate: local laws to combat fraud and money laundering may require this; Financing of terrorism. In addition, the KYC procedure at ICO opens a series of additional possibilities for the organization that makes it and makes it more reliable in the eyes of state regulators. The identification answers the questions: who brings money to the project; why this money is paid; where did they come from
The KYC procedure allows you to solve several problems:
1. Increase the credibility of the banking system. The implementation of KYC during the generation and sale of tokens facilitates that the project team works with the banks and complies with the legal norms against money laundering. Compliance with the laws in the OIC procedure gives the project a sign of "legality" and attracts investors who are willing to invest money when KYC requirements are met.
2. Distribution of the investment platform. Cases must be carried out in a transparent manner, especially in those regions where there is the possibility of complying with local laws. Given that the power structures of the large regional markets (Asia, USA, Europe) converge in the classification of ICO as securities transactions, the ICO itself (and its authors) must be proactive and align the projects with the laws of the respective countries and the markets
3. Long-term legalization. Any successful business that aims at a long existence must take into account existing laws and comply with them. The legality of the project is based on how well designed and protected are the active cryptographic assets and those management contracts.
4. Improve public acceptance of a project. Despite the general exaggeration around the cryptocurrency and the ICO, the lack of norms and regulation methods, the general information about these phenomena makes them potentially vulnerable to scammers. The more the team reports to the public about their overall plans, financial structure, use of funds raised, associated risks and other aspects of the project, the better people will be able to appreciate the importance of the offer for themselves.
5. Extension of coverage. The voluntary implementation of KYC procedures helps ICO projects reach a wider audience and increase the number of jurisdictions where a particular platform has the right to operate. This allows it to attract new investors, especially from Canada and the United States with its strict laws.
6. Monitoring of funds. If ICO is open to US investors, you should consider how to avoid selling the tokens you bought during the next 12 months. And if US investors can not participate in the project, how can they avoid buying in the future? The synthesis of KYC procedures and anti-money laundering legislation will allow you to better track the flow of money and connect with investors.
7. Avoid sanctions and fines. In many jurisdictions, authorities impose severe fines on ICO projects, if they are considered to sell securities, in accordance with local finance laws. KYC allows you to comply with legal requirements and avoid sanctions and penalties.
The KYCBench platform, as a leading KYC service adviser, directly for the ICO media and resolves the following questions: verification and confirmation of the investor's identity; Analysis of your personal, financial and business activity data. Risk assessment of fraud, theft or money laundering.
There is a new practice, which comes in the palace: a procedure of Know your client for the ICO team. Many authorized experts in the cryptocurrency world consider that this is of vital importance to evaluate the reliability and success of a project; Therefore, the developers themselves are often identified.
KYCbench, your reliable KYC partner
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