Identity verification scares many new crypto-buyers. And for good reason, we give sensitive information to an organization that we do not know! They could use them to impersonate us or blackmail us. But in reality, identity verification is a guarantee of quality, because it means that the company complies with the European laws in force. In fact, any financial or related organization that holds an account on our behalf must be able to identify us. These process standards for verifying customer identities are commonly referred to as “KYC “(for Know Your Customer).
However, be careful not to give this information to any entity. It is important to ensure that personal information is given to a company that is safe. To check this, you can look at its SEO on Google, ask on specialized forums if the site is reliable. It is also possible to verify that the company is registered in the Commercial Register or equivalent in another country. In addition, you can check the list of fraudulent sites on Cryptocurrency Scam List, which is regularly updated and says much about the scams that flourish on the Internet.
In which cases does an exchange have to verify the identity of its customers?
The obligation for an exchange to know the holder of the assets, is currently obligatory only for fiat currencies. Indeed, in Europe, there is still no regulation at the cryptocurrency level. Thus, only the trading platforms that allow you to buy crypto-currencies directly against dollars or euros are concerned. For example, identity verification is mandatory for the following exchanges: Coinbase, Kraken, Bitfinex or eToro.
KYC: Warning for Airdrops
We advise you to pay close attention to the airdrops that ask you for your identity. Indeed, currently, they have no obligation to do so, it is possible that your information is used for commercial or fraudulent purposes. The lure of gain can squeeze a lot of crypto-beginners to give personal information against a few tokens. Even if the company is honest, it is possible that it is created by people not sufficiently experienced in computer security, who would potentially be able to be hacked. This danger is the result of the ease with which it is possible to create an ERC20 token