Why the Crypto Market Needs KYC and How to Stay Anonymous without Breaking a Law

Anonymity became a barrier, lasting successful the mode of cryptocurrency wide adoption by the accepted fiscal market. At the aforesaid time, abandoning confidentiality contradicts the halfway conception of integer assets. To fulfill interests of some cryptocurrency users and regulators, a trade-off was needed. The solution has already been created. Let’s dive deeper and larn however to stay anonymous successful the crypto marketplace without breaking a azygous law.

What is KYC and what does it person to bash with cryptocurrencies?

The abbreviation KYC stands for Know Your Customer. This explanation is often utilized successful the discourse of the fiscal market. KYC refers to a scope of processes aimed astatine ascertaining the individuality of the idiosyncratic who plans to behaviour a fiscal transaction.

Cryptocurrencies are a fiscal instrumentality that, by the covenant of the laminitis of Bitcoin Satoshi Nakamoto, should beryllium anonymous. From regulators’ constituent of view, afloat confidential transactions transportation risks associated with wealth laundering, violent funding, and different amerciable activities. That is wherefore governing authorities request to tube cryptocurrencies’ users done KYC procedures.

Crypto marketplace participants are besides funny successful having convenience for each parties — users and regulators — relating norms for idiosyncratic identification. In fact, the authorities tin not let the dispersed of an anonymous fiscal instrumentality that they tin not power owed to its confidentiality.

Transacting with cryptocurrencies by pursuing the KYC procedures tin beryllium seen arsenic a two-way street: crypto assemblage members tin proceed transactions with integer assets, portion regulators volition person tools to power deals with specified coins. That being said, users shall waive anonymity successful that case.

What is incorrect with KYC successful the crypto manufacture and accepted market?

Crypto projects, including large exchanges, aspire to locomotion successful a ineligible realm. For that, they request to beryllium regulators’ “friends”. The champion mode to summation the spot of governing agencies erstwhile it comes to cryptocurrencies is to run successful accordance with KYC requirements.

The modular individuality verification process successful the crypto manufacture entails respective steps, including the following:

• Providing a 3rd enactment (the level wherever the registration takes place) idiosyncratic data, including surname, name, spot of residency;
• Providing documents to corroborate the user’s identity.

Also, platforms often inquire users to instrumentality a selfie with a supporting papers successful hand.

Interesting! Many crypto projects motivate users to spell done KYC procedures by implementing limits. For example, immoderate trading platforms alteration operational limits for users that person not completed the verification procedure.

Crypto task representatives make KYC databases that mightiness see individuality supporting papers scans oregon different magnets for fraudsters. As a result, cryptocurrency platforms became targets for wrongdoers.

The signifier has shown that adjacent large players tin not safely support their clients’ KYC data. For example, successful 2019 verification documents of Binance’s users were leaked to the internet. At first, the trading platform’s representatives denied the leak but they had to admit it aft the photos of the clients were posted.

The “apologetic” effect of Binance’s squad was to connection victims a beingness VIP membership. Many marketplace participants clasp the sentiment that it was not a just effect towards radical that were astatine hazard owed to the vulnerabilities of the trading platform. In fact, fraudsters tin usage KYC information and photos for theft and different amerciable activities.

Such incidents carnivore dense outgo to the companies’ goodwill. Fortunately, modern organizations tin debar specified failures.

How to lick the KYC problem

It appears that the crypto assemblage tin not waive KYC, different cryptocurrencies would not beryllium integrated with the accepted fiscal market. At the aforesaid time, arsenic marketplace acquisition shows, it mightiness beryllium unsafe to supply 3rd parties with verification information and photos of the documents. A solution to this occupation was offered by the Czech institution Hashbon. This squad was the archetypal to make the conception of the integer passport Hashbon Pass (NFT Passport). Here is however it works:

• A idiosyncratic that seeks to get the NFT Passport transfers the idiosyncratic information to a radical of approved and screened licensed verifiers.
• Verifiers behaviour a cheque and, successful lawsuit of lack of reddish flags, contented a integer NFT Passport. As a reminder, the non-fungible token format ensures that the accusation is fixed successful the integer plus connected the blockchain. The exertion safeguards the registry against immoderate falsification, truthful information from the Hashbon Pass NFT passport is intolerable to fake. Thus, guaranteeing the authenticity of verification records.
• The proprietor of the integer passport Hashbon Pass tin contiguous the papers for verification connected platforms that travel KYC rules. In this case, 3rd parties volition person nary entree to the users’ confidential data, and an NFT Passport doesn’t person immoderate idiosyncratic info from the papers submitted. Instead, the work volition beryllium presented with the NFT Passport that verifies the identity.

In that way, Hashbon Pass ensures anonymous usage of crypto platforms, including projects successful the decentralized concern conception (DeFi). Also, NFT Passports tin beryllium utilized for confidential individuality verification portion moving with platforms successful the accepted fiscal conception like, for example, banks. Other usage cases for the Hashbon Pass see anonymous lawful property confirmation and to bypass CAPTCHA.

NFT Passport Issuance and Use Cases

Interesting! If needed, for example, successful the lawsuit of regulatory checks, authorities agencies tin petition KYC information from verifiers.

Here is the database of problems that the NFT passport Hashbon Pass solves:

• Protection against 3rd enactment idiosyncratic information leaks;
• Time savers: alternatively of filling done registration forms, Hashbon Pass holders tin conscionable contiguous their NFT Passport.

Hashbon Pass opportunities

It appears that Hashbon Pass offers anonymous and wholly harmless KYC individuality verification. Not lone successful the decentralized concern market, but besides successful the accepted fiscal industry. For companies, a concern with Hashbon Pass allows for a simpler verification process and protects clients from information leakages. All these factors summation their appeal.

The Hashbon Pass motorboat is planned for the extremity of June 2022. Become the project’s spouse to beryllium among the archetypal to connection clients an casual and harmless mode for anonymous KYC verification. Follow updates and petition a demo connected the authoritative Hashbon webpage.