Today’s post explains why Binance, like other crypto exchanges, requests customers to complete KYC verification.
Without any doubt, anonymity is a feature that makes the cryptocurrency space attractive.
However, when it is not put in check, it poses the risk of fraud, hence the need for KYC.
But many people argue that KYC opposes the decentralization of Crypto. Hmm…
Keep reading to better understand KYC and how you can complete yours on Binance.
- What Is KYC?
- Benefits of KYC
- Why Binance Takes KYC Seriously
- Common Features Of KYC
- How To Complete KYC Verification On Binance
- KYC And Decentralization
Click on any item above to read its details immediately.
1. What Is KYC?
KYC is short for Know Your Customer or Know Your Client.
It is a regulatory measure used by financial service providers to identify and verify their customers.
The goal is to reduce the possibility of financial crimes to the barest minimum.
When financial service providers e.g. a cryptocurrency exchange can verify their customers’ identities, it makes it difficult for their platforms to be used for illegal transactions.
Usually, customers are required to provide personal information and then verify it with valid documents.
However, the process could be exhausting and sometimes annoying.
That’s why a ‘no-KYC’ feature is commonly viewed as an advantage in the crypto space.
But we cannot dismiss the need for safe management of funds, which KYC helps to achieve.
I elaborated more on the benefits of KYC in the next section.
2. Benefits of KYC
Though it may not look like it, Know Your Customer offers several benefits including:
It helps to build trust in financial service providers. Having a KYC feature shows that a provider is accountable.
Know Your Customer also helps to secure funds as transactions can be traced when something goes wrong.
Thus, frustrating the activities of fraudsters posing as customers.
With KYC in place, customers will better manage the risks of lending since they can easily access the financial history of the other party.
Also, the platform involved reduces the risk of being used for money laundering.
You can now see why crypto exchanges like Binance mandate their customers to complete KYC.
Let’s talk more about that in the next section.
3. Why Binance Takes KYC Seriously
As it is with all crypto exchanges, Binance did not drop from the sky.
Therefore, it is normal that it will try to abide by the laws of the land.
Adopting KYC makes Binance an anti-money laundering complaint.
Secondly, crypto is pseudonymous, making it susceptible to scam.
Since Binance deals on crypto, it needs a tool to prevent such scams and that’s where KYC comes in.
Being able to know who is trading what and with who, is an advantage.
Furthermore, blockchain transactions may be irreversible but with KYC in place, the admins of the exchange can help customers find solutions when they make mistakes in their transactions.
Again, some governments still see cryptocurrency as a threat. Subsequently, exchanges like Binance are regarded as the enemy.
KYC verification is one way Binance helps the governments of the countries where it is present to combat financial crimes.
Moreover, KYC does not benefit the exchange alone but the customers as well.
Verified users of Binance get to enjoy a tier upgrade with lower fees and higher withdrawal limits.
Not to mention unlimited access to the excellent services offered by the exchange.
Know Your Customer also provides an additional layer of security to each user’s account.
4. Common Features Of KYC
KYC processes vary in businesses but they usually include:
Customer Identification Program (CIP)
Here, the customer data is collected and verified. It is the first and simplest step.
After registering on Binance for example, you’ll be required to provide a means of identification like a driver’s license to verify your account.
Customer Due Diligence (DD)
This involves a business doing a background check on the customer to confirm that he has no history of financial fraud.
In addition to collecting customer information, businesses usually develop a means to help customers update this information whenever there’s a change.
Ongoing monitoring also covers spotting transactions that appear suspicious.
The customer account in question may be suspended or reported to law enforcement bodies.
As mentioned, the processes vary for different businesses.
In Binance, there are 3 levels of verification. Any level you complete determines the transactions you can carry out.
Find more details below;
Note: the requirements may vary depending on your country.
Moving on, I’ll show you how to complete your KYC verification on Binance.
5. How To Complete KYC Verification On Binance
Follow these simple steps:
i. Log in to your Binance account. Click on profile and then select ‘Identification’.
(Don’t have an account? No worries! Create one using my referral link)
ii. Now, click on ‘Get verified’ and select your country of residence
iii. You’ll find the different levels of verification. Click on ‘Verify Now’ to get started.
iv. Next, you complete the fields that will pop up with your personal information – make sure it tallies with what is on your ID.
v. Then click on ‘Continue’. You’ve completed Basic verification.👏 Click on ‘Upgrade’ to proceed to Intermediate.
vi. This time, you’ll need to upload pictures of your ID documents. Follow the given instructions.
vii. The next step is to take a ‘selfie’ or upload a photo from your computer.
viii. After that, click on ‘continue’ to finish your face verification.
ix. At this point, you’ll wait for the platform to review your data and notify you via mail of a successful verification.👍
If you need pictorials for the above steps or prefer to watch a video, please click here.
In the next section, I talked about how KYC affects decentralization.
6. KYC And Decentralization
No doubt, crypto users are worried about losing anonymity when they submit their private details to centralized cryptocurrency exchanges.
Nevertheless, the decentralization of crypto has made it a method of laundering money. An issue we cannot afford to ignore.
Crypto users must understand that KYC is not a fight against decentralization rather, it is a measure to protect them from money laundering, terrorism financing, fraud, and the illicit transfer of funds.
Gratefully, cryptocurrency exchanges are obligated to secure users’ private information.
For example, Binance has a secure and dedicated system for customer data collection and management.
Let’s answer some frequently asked questions and then we can call this post a wrap.
Anti-money Laundering (AML) covers a wide range of regulatory processes designed to curb money laundering. KYC is one such process.
In other words, Know Your Customer is a part of AML.
The popular ones are:
– Driver’s License
– International Passport
– Identification Card
– Bank statement
– Utility bill (electricity, water, waste disposal, internet, etc.)
It differs by country but at the international level, the Financial Action Task Force (FATF) coordinates multinational cooperation on regulatory conditions.
Know Your Customer is a proactive approach taken by most crypto exchanges to prevent financial crimes.
Considering the security it provides and the unlimited access to services, completing KYC is worth your time.
So, what are you waiting for? Click here to get verified on Binance.
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