📝 Definition:
KYC stands for “Know Your Customer.”
It’s a process where financial platforms (banks, online payment apps, crypto exchanges...) check who you are by asking for some ID and other documents.
This helps keep things safe and legal.
🔑 Key Features:
- Identity Verification: You provide documents like a passport or driver’s license.
- Compliance: It helps companies follow the law.
- Risk Management: The process helps identify users to prevent illegal activities.
- User Security: Protects everyone from fraud.
⚙️ How It Works:
- Submit Documents: You give personal documents like your ID and proof of address.
- Verification Process: The platform checks these documents to confirm your identity.
- Approval or Rejection: After checking, you can start using the services. If there’s an issue, they might ask for more info.
💡 Applications:
- Cryptocurrency Exchanges: Sites like Binance and Coinbase use KYC to verify users.
- Financial Institutions: Most crypto exchanges need KYC to comply with anti-money laundering laws.
- Online Services: Some online platforms also use KYC for added security.
🔍 Example:
Imagine you want to open an account on a cryptocurrency exchange.
They’ll ask for your ID and a proof of address to make sure it’s really you.
Once verified, you can trade and withdraw funds safely.