Last updated on October 3rd, 2022 at 03:43 am

Yet with a lot of opposition to its application as a kind of money, Bitcoin and its blockchain technology has evolved. It initiated the entire idea of cryptocurrencies and not only that its initial growth and subsequently rising value and interest have spawned many new industries. 

As among all industries where any sort of money or financial value is involved, there will constantly be the threat of money laundering, cyberattacks, and malicious attacks both by the business itself or the end-user.  In this fact, know your customer compliance is vital not only to adhere to laws and regulations set by the corporate entity or other regulatory bodies but also to secure one’s own company and financial gains. We will discuss more on what the companies are and how they can take advantage of knowing their users and IDV. Lastly, we will discuss Know Your Consumer solutions and what a company should look for when seeking them. 

Bitcoin and Blockchain affiliated companies

As discussed earlier, Bitcoin and blockchain technology has given emergence to several companies that are concentrated around them. We’ll be focusing on what they are and then in the initial part, we’ll elaborate on how we can secure themselves through Know Your Customer compliance and IDV. 

Bitcoin and Cryptocurrency Agent- By the ever-changing demand of Bitcoin and Cryptocurrencies, several individuals apply them as a sort of investment and to use as a form of money. These individuals are consistently finding professionals in the domain of Bitcoins and cryptocurrency for consultation and guidance on how they can be a part of the crypto pie. This is greatly rewarding and much solicited after the position. The main element is that professionals should be able to assist people in all sorts of categories including risk management and minimization. 

Cryptocurrency Wallet- The idea of the crypto wallet has stayed around since the initial time that Bitcoin and Blockchain came into existence. It gives a safe place to store the virtual currency. As more individuals turn towards the creation of these crypto wallets we find more advancement in terms of the handling and safety that these virtual coin storages provide.

Trading of bitcoin and crypto exchange- This program came into existence following the stock-market method. As individuals turned towards the blockchain they found venues where they could exchange cash and other blockchains for virtual currency and vice versa. 

Cloud-based Bitcoin and Cryptocurrency Mining- Bitcoin and crypto payments need autonomous IDV that can simply be completed via the functional system. As an award for these authentication checks, individuals have rewarded a specific fee of the crypto. This procedure is known as mining. 

Initial Coin Offering employing blockchain technology- this is the greatest company that has evolved as a result of bitcoin and distributed ledger technology. Related to an initial public offering, many businesses and companies are turning to cryptocurrency and giving initial coin offerings in return for finding potential investors. Investors finance the mentioned businesses in return for these currencies which rely on the performance of the business are estimated to rise in financial value. Some businesses even offer advantages and interests in the form of commissions and alternative coins. 

Bitcoin ATMs have become immensely common since they enable individuals to buy or sell their bitcoins from the ease of a digitized machine related to the ATMs that enable the withdrawal and deposit of money. 

Ways Know Your Customer can safeguard the companies

Corporate entities and other financial regulatory bodies are operating by imposing stringent regulations and laws on blockchain technology and other cryptocurrencies. So, the initial point is if you are already following the present know your customer (KYC) and verification regulations then you have saved your company from heavy penalties and even from shutting down. (We interviewed Webisoft.com and they say KYC is the most common issue brought up by their customers.)

Bitcoin and cryptocurrency exchange, cloud crypto mining businesses, Bitcoin ATMs, and companies offering initial coin offerings all need to pass through to know your customer and IDV. The easy reason is that they deal with credit cards and debit cards or fiat currency. Where these sorts of transactions have used the possibilities for theft and the use of money laundering rise. Hence, there is the possibility of chargeback with the adoption of stolen cards.  A chargeback can likely be related to a legitimate user who noticed there is no identity document authentication included and subsequently, choose to report they haven’t done the payment and receive the Bitcoins.

Crypto wallets although do not deal with debit cards and currency in general, but are authorized to be investigated in fraudulent activities investigations. It is important for them to make sure that they are following Know Your Customer and verification regulations to avoid a bad reputation and heavy penalties. For crypto consultants it is vital that they are informed of all laws and comprehend the best practices included in Bitcoin businesses, therefore, it is vital for them to understand the several Know Your Customer compliance requirements and IDV laws and regulations. 

Issues of Know Your Customer Compliance for Crypto-verse

Know Your Customer services for a cryptocurrency provides an extra layer of security, which is an exemplary match to the inherent obscurity of blockchain-based cryptocurrencies. Digital Know Your Customer opens new paths of collaboration between crypto-enthusiasts and those propelling fascinating new items using the several benefits of blockchain technology. So, the main problem in the wide-scale utilization of know your customer solution in crypto-verse can be readily discussed as:

The stigma associated with cryptocurrency:

Unfortunately, cryptocurrency in general and Bitcoin has gained a bad repute since of its prior users being involved in various illegitimate activities. There is no uncertainty that the decentralized characteristic of bitcoin nature brought by an enormous swath of individuals who wanted to employ the digital currency as a medium of payment for their illegitimate activities. But now, even cryptocurrency and a major chunk of bitcoin are being adopted for the wide-scale utilization of blockchain technology and to raise funds through initial cash offering. 

Suspicions rising from Volatility:

Just lately, all main cryptocurrencies saw an unusual drop in currency. Due to the large price hike, there is no usual consent on the reason for this subtle change in prices. This also presents issues for an organization that wants to combine identity document verification with their crypto wallets or want to adopt know your customer and anti-money laundering for their upcoming initial coin offering.