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Cryptocurrency KYC [why it matters]

There’s no escape from KYC in the world of finance and banking operations. For the newbies out there, KYC means Know Your Customer. It is a mandatory process for identifying and…

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There’s no escape from KYC in the world of finance and banking operations. For the newbies out there, KYC means Know Your Customer. It is a mandatory process for identifying and verifying customers the world over. In this post, we will give an overview of what KYC is, where it came from, the difference between KYC and AML, why it’s important and what you may need to provide and we’ll take a look at KYC and digital cryptocurrency exchanges. Without further ado, let’s dig into ‘Cryptocurrency KYC [why it matters]’.

Table of Contents

Why introduce KYC?

KYC laws were introduced in 2001 as part of the Patriot Act which was passed after 9/11 to provide a variety of means to deter terrorist behaviour.

By first verifying customers’ identities and intentions and then understanding their customers’ transaction patterns, financial institutions are able to more accurately identify suspicious activities.

Terrorist financing and money laundering often rely on anonymously opened accounts, and the increased emphasis on KYC regulation has led to increased reporting of suspicious transactions.

Regulations are becoming stricter, meaning financial institutions have to spend more money to comply with them—or be subjected to steep fines.

KYC in the cryptocurrency sphere is something that is increasingly important as the industry matures

KYC and AML: What’s the difference?

The AML concept is much broader than KYC. AML stands for Anti-Money Laundering and refers to a set of policies, laws, and regulations to combat generating income in a fraudulent way.

An AML program may consist of the following:

  • KYC procedure: Customer Due Diligence (CDD) and Enhanced Due Diligence(EDD).
  • Risk-based AML policies
  • Ongoing Risk Assessment and Ongoing Monitoring,
  • AML compliance training programs for staff
  • Internal Controls and Internal Audits

Why does KYC matter?

Cryptocurrency KYC is a manual process that includes physical verification of document scans. It is important because it makes sure that the customer and the information provided by them are real.

KYC and digital exchanges

While some people may see anonymous trading as a feature of the cryptocurrency market, it can also enable problematic business practices and criminal or terrorist activity. Anonymity in the wrong hands can be a dangerous weapon.

In essence, the cryptocurrency KYC process for digital exchanges and banks is the same. It always requires proof of identity (POI), proof of address (POA), and other relevant information for verification. However, the actual steps included in the process may differ from exchange to exchange

Cryptocurrency exchanges can request or accept different types of IDs, ask to sign different forms, and include different procedures overall.

OK, I know KYC is my friend, but I still want options on no KYC needed digital exchanges…

There are several bitcoin exchanges on the market which allows you to use the services without verifying your identity. This means that during registration no personal details need to be provided. At an anonymous bitcoin exchange, most of the cases you just need to provide an email and a password and you can trade instantly.

A limitation (depending on your viewpoint on the subject of KYC) of anonymous crypto exchange platforms is they apply a threshold for unverified users both in terms of trading volume and daily or lifetime withdrawals. This can cause a potential problem to those who would like to engage in trading activity anonymously with a high amount of funds.

Exchanges that offer no KYC options include:

PrimeXBT.com Bitmex.com Livecoin.net  HitBTC

***At cryptocoindude.com, we’d always recommend a regulated exchange that offers robust KYC and AML as this offers a piece of mind that is hard to put a price on.***

OK… which documents do I need?

The most important documents for submission are proof of identity and proof of address.

The following documents are generally accepted as proof of identity:

  • Passport;
  • Driving license;
  • Voter’s Identity Card

When it comes to proof of address, the documents that can be submitted are as follows:

  • Passport;
  • Utility bill, e.g., telephone bill, electricity bill, gas bill;
  • Bank account statement with signature verification;
  • Letter from employer, bank manager of scheduled commercial banks

*** TOP TIP – Always have up to date documentation saved in the correct format ready to upload to pass KYC. Passing the checks in one attempt is the best way to reduce the frustration of back and forth’s between the platform’s support team***

What happens after verification?

KYC updates also include monitoring customer transactions, which is an essential element of the KYC policy. Why is it done? To be able to differentiate between normal and suspicious customer behaviour in the financial sector, this behaviour needs to be analysed in the first place. It’s better done through transaction monitoring.

Some problems with KYC

Given the cost of instituting KYC/AML, startups and smaller companies are often the ones who suffer the most. A company that cannot afford to dedicate funds toward KYC/AML regulation, in many cases, will not receive licensing.

Cryptocurrency KYC [why it matters] final conclusions

KYC/AML at the moment acts as a double-edged sword. Implementation has the ability to attract investors who are sceptical of the security in the crypto industry. However, they also can limit innovation altogether by restricting licensing to companies which cannot afford the cost of KYC/AML upkeep.

In an increasingly regulated space, KYC will become increasingly used as the standard when using platforms the most notable thing KYC does is provide the crypto industry with some much-needed maturity. Decentralised trust will be the cornerstone of peer-to-peer shared economies of the future.

Source: https://cryptocoindude.com/cryptocurrency-kyc-why-it-matters/?utm_source=rss&utm_medium=rss&utm_campaign=cryptocurrency-kyc-why-it-matters

Blockchain

Kraken Daily Market Report for February 24 2021

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Overview


  • Total spot trading volume at $2.43 billion, up 18% from the 30-day average of $2.06 billion.
  • Total futures notional at $742.6 million.
  • The top five traded coins were, respectively, Bitcoin, Ethereum, Tether, Cardano, and Polkadot.
  • Strong returns from Augur (+22%), Icon (+20%), Lisk (18%), and Compound (18%).

February 24, 2021 
 $2.43B traded across all markets today
 Crypto, EUR, USD, JPY, CAD, GBP, CHF, AUD 
XBT 
$50855. 
↑4.0% 
$927.5M
ETH 
$1694.5 
↑7.3% 
$442.0M
USDT 
$1.0009 
↑0.06% 
$308.7M
ADA 
$1.0666 
↑11% 
$140.5M
DOT 
$36.359 
↑5.2% 
$112.8M
USDC 
$1.0002 
↑0.01% 
$58.0M
XDG 
$0.0552 
↑16% 
$46.8M
XRP 
$0.4888 
↑2.7% 
$45.1M
LTC 
$187.16 
↑5.4% 
$44.2M
LINK 
$28.266 
↑8.8% 
$43.1M
BCH 
$546.64 
↑5.9% 
$19.9M
ATOM 
$20.971 
↑4.1% 
$17.4M
XLM 
$0.4278 
↑11% 
$17.0M
FLOW 
$22.203 
↑3.6% 
$14.8M
UNI 
$26.741 
↑7.6% 
$13.7M
GRT 
$1.9695 
↑16% 
$13.2M
AAVE 
$398.38 
↑9.2% 
$9.83M
ALGO 
$1.1312 
↑12% 
$9.67M
KSM 
$259.95 
↑8.0% 
$9.22M
XMR 
$218.18 
↓1.3% 
$9.14M
DASH 
$253.84 
↑9.8% 
$8.88M
EOS 
$4.0463 
↑5.0% 
$8.57M
XTZ 
$3.8502 
↑8.5% 
$8.23M
TRX 
$0.0492 
↑9.5% 
$4.84M
DAI 
$1.0012 
↓0.01% 
$4.78M
ICX 
$1.7515 
↑20% 
$4.63M
QTUM 
$5.5107 
↑7.1% 
$4.55M
SNX 
$20.534 
↑13% 
$4.44M
OMG 
$5.0897 
↑8.7% 
$4.29M
BAT 
$0.5229 
↑9.5% 
$4.29M
SC 
$0.0113 
↑3.3% 
$3.78M
WAVES 
$10.304 
↑10% 
$3.76M
NANO 
$6.0203 
↑16% 
$3.59M
YFI 
$36385. 
↑8.8% 
$3.55M
ZEC 
$131.65 
↑3.6% 
$3.33M
FIL 
$37.762 
↑6.3% 
$3.21M
COMP 
$452.55 
↑18% 
$2.38M
OXT 
$0.5371 
↑8.4% 
$2.12M
ETC 
$12.339 
↑8.4% 
$2.07M
LSK 
$3.1380 
↑18% 
$1.93M
KAVA 
$3.7965 
↑17% 
$1.57M
MANA 
$0.2622 
↑13% 
$1.53M
REP 
$35.637 
↑22% 
$1.49M
CRV 
$2.2995 
↑7.7% 
$1.45M
KNC 
$1.7123 
↑6.8% 
$982K
MLN 
$41.951 
↑12% 
$834K
PAXG 
$1804.9 
↓0.2% 
$778K
KEEP 
$0.3739 
↑10% 
$710K
STORJ 
$0.6370 
↑12% 
$670K
ANT 
$4.7319 
↑10.0% 
$576K
BAL 
$40.659 
↑16% 
$568K
GNO 
$141.23 
↑11% 
$508K
REPV2 
$26.630 
↑8.9% 
$274K
TBTC 
$54060. 
↑9.8% 
$244K


#####################. Trading Volume by Asset. ##########################################

Trading Volume by Asset


The figures below break down the trading volume of the largest, mid-size, and smallest assets. Cryptos are in purple, fiats are in blue. For each asset, the chart contains the daily trading volume in USD, and the percentage of the total trading volume. The percentages for fiats and cryptos are treated separately, so that they both add up to 100%.

Figure 1: Largest trading assets: trading volume (measured in USD) and its percentage of the total trading volume (February 24 2021)

Figure 2: Mid-size trading assets: (measured in USD) (February 24 2021)

Figure 3: Smallest trading assets: (measured in USD) (February 24 2021)


#####################. Spread %. ##########################################

Spread %


Spread percentage is the width of the bid/ask spread divided by the bid/ask midpoint. The values are generated by taking the median spread percentage over each minute, then the average of the medians over the day.

Figure 4: Average spread % by pair (February 24 2021)



.


#########. Returns and Volume ############################################

Returns and Volume


Figure 5: Returns of the four highest volume pairs (February 24 2021)


Figure 6: Volume of the major currencies and an average line that fits the data to a sinusoidal curve to show the daily volume highs and lows (February 24 2021)



###########. Daily Returns. #################################################

Daily Returns %


Figure 7: Returns over USD and XBT. Relative volume and return size is indicated by the size of the font. (February 24 2021)



###########. Disclaimer #################################################

The values generated in this report are from public market data distributed from Kraken WebSockets api. The total volumes and returns are calculated over the reporting day using UTC time.

Source: https://blog.kraken.com/post/8041/kraken-daily-market-report-for-february-24-2021/

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Blockchain

India’s largest crypto exchange adopts decentralized Unstoppable Domains

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India’s largest cryptocurrency exchange, Unocoin, has adopted the blockchain-based Unstoppable Domains, which simplifies crypto transactions by turning blockchain addresses into human-readable web URLs.

Announced on Wednesday, the partnership between Unocoin and Unstoppable Domains — both funded by Silicon Valley investor Tim Draper — is expected to reduce remittance costs and simplify the transaction process for the exchange’s 1.2 million users.

Unstoppable Domains turns crypto addresses into decentralized websites on the Ethereum and Zilliqa blockchains. Instead of sending coins to a 42-character blockchain address, Unstoppable Domains allows users to create simple URLs ending in “.crypto” and “.zil” extensions. Domain names need only be purchased once, and then exist forever on the blockchain without requiring any renewal or maintenance fees.

The decentralized aspect of Unstoppable Domains should be of particular interest to Indian crypto users, especially amid the furor created by the Finance Ministry’s decision to ban the use of Bitcoin (BTC) and other cryptocurrencies.

Pushback against the country’s plan to outlaw cryptocurrency has emerged on social media in the form of the #IndiaWantsBitcoin campaign. Despite regulatory uncertainty, the co-founder and CEO of Unocoin, Sathvik Vishwanath, sees the adoption of Unstoppable Domains as being in line with the maturation of the crypto industry in India. Vishwanath said:

“The cryptocurrency space is maturing. In line with the growth of the industry, Unocoin aims to offer its users the best possible experience. Integrating the .crypto domain is a significant step not only for Unocoin users, but also for additional exchanges in the country exploring simpler and more user-friendly options for their users.”

Unstoppable Domains co-founder Brad Kam referenced the reluctance of the Indian government to allow the spread of cryptocurrency within its borders:

“India’s population has been historically scorned from cryptocurrency. Unstoppable Domains is excited to deliver the seamless sending and receiving of cryptocurrency to Unocoin’s users. Our aim is to simplify cryptocurrency addresses, and establish human readable names as the domain standard across wallets and exchanges.”

On Wednesday, Reserve Bank of India Governor Shaktikanta Das reiterated the central bank’s intention to create its own centrally issued currency, the digital rupee. This follows a common trend that has emerged in recent years as national governments attempt to reign-in the spread of decentralized cryptocurrencies and replace them with digital versions of existing fiat currencies.

As reported by Cointelegraph, Unstoppable Domains was recently integrated into Cloudflare’s Distributed Web Resolver, meaning any web browser can now access the .crypto URL extensions.

A spokesperson for Unstoppable Domains confirmed to Cointelegraph that even if Unocoin were to be shut down in the near future, the addresses and URLs created through the platform would remain unaffected.

Source: https://cointelegraph.com/news/india-s-largest-crypto-exchange-adopts-decentralized-unstoppable-domains

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Blockchain

DEX volumes have already surpassed $120b in 2021

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Ethereum-powered decentralized exchanges, or DEXes, continue to surge despite high transaction fees — with DEXes processing more than $120 billion in 2021 so far.

According to Ethereum market analytics platform Dune Analytics, combined DEX volumes posted a new record of $63 billion in January. February’s volume currently sits at $59 billion and is on track to hit $67 billion at the month’s end.

DEXes have already processed more volume in the first two months of 2021 than during all previous years combined.

Monthly DEX volume: DuneAnalytics

The Ethereum-powered DEX sector is still dominated by Uniswap and Sushiswap, who account for 65% of February’s trade combined. Uniswap currently represents more than double Sushi’s volume, controlling almost 50% of DEX market share.

However, looking at the weekly number of active traders on each platform shows that Uniswap represents more than three-quarters of Ethereum DEX users. Over the last seven days, nearly 142,000 unique wallets traded on Uniswap, followed by decentralized exchange aggregator 1inch with roughly 18,450 traders, and SushiSwap with 8,911.

However, not all DEX trading activity is occurring on Etheruem, with Binance Chain’s Pancake Swap surging to report a daily trading volume behind of more than $1.1 billion.

Despite some users migrating away from Ethereum-based DEXes, confidence in the sector as a whole is at an all-time high, with the total value locked in these exchanges sitting above $40 billion for the first time during recent weeks.

Source: https://cointelegraph.com/news/dex-volumes-have-already-surpassed-120b-in-2021

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