Introduction
Verification is the process of verifying the data of a user in order to verify his identity. The client must provide his data, such as copies of his passport, TIN, bank statements to confirm the residential address, and agree to the processing and verification of provided information by representatives of the crypto currency exchange.
For financial regulators and governments, KYC and AML are critical as a way to prevent a crime of money laundering, theft, and other illegal activities. The use of these policies will legalize the crypto industry.
This is why KYC and AML are important. But that is not what block chain and bitcoin were created for. While banks control fiat currencies, crypto currencies are independent and power is in the hands of mere mortals.
In any case, verification has a number of positive aspects (at first sight):
- Determining the owner of the assets. You prove that your digital asset was obtained legally, and also confirm that the electronic wallets of payment systems or plastic cards used to withdraw funds from your account belong to the account holder. In other words, hackers will not be able to withdraw your funds as the card number, or bank account number as it is not assigned to you in the system. And this is not entirely true. Intruders can still access your account and withdraw funds to their crypto currency wallets.
- It means that the crypto currency exchange acts in accordance with the law. You can be sure that the trading platform you choose will treat your funds in good faith and that you will be able to withdraw funds from your account. This is also a delusion. You could have acquired crypto currency assets legally, but the seller could have received them, for example, from scammers or hackers. You will get a lot of headaches before you regain control of your funds. Crypto currency means you have complete control over your own assets, but in such case, you are still under the hood.
Identity verification is a big problem today for technology companies, financial institutions, and government agencies.
This task is no less acute for the crypto industry: on the one hand, it is required to maintain the necessary privacy and protect user data from hacking and “third parties”, on the other hand, something must be done with the growth of crypto currency fraud.
Many people decide to verify their identity on popular services, but there are always be users who do not want to waste their freedom and privacy, and there are still some services that allow users to stay anonymous in the era of transparency.
One of such services is a cryptex exchange, providing all the services without identity verification. Most likely, in the future, there will be even stricter rules for passing verification on the exchange than KYC and ALM, although there are still exchanges without verification.
Conclusion
Despite the long-term goal of the crypto industry to become an alternative to traditional finance and break away from the outdated big banking industry, it is sadly forced to play by the rules set by governments and regulators in most jurisdictions across the globe.
That being said, we are lucky to have platforms such as cryptex exchange and crypto currencies like Monero, both which will likely continue to exist as the cryptocurrency and DEFI industry further matures and the desire for anonymity continues.
