Know Your Customer, or KYC has been an aspect of the financial services world, and it is especially so in the case of cryptocurrency. Although many take the view that their KYC requirements stifle innovation and privacy in the crypto world, others believe them to be of paramount importance in the fight against illicit activities and the integrity of the ecosystem.
This article explores the concept of KYC applied in the case of Indian crypto exchanges and explains why it must exist
What is KYC?
KYC is practically a procedure that verifies the identity of any financial institution's customer. The prime reason behind following KYC is to collect personal data, such as names, addresses, dates of birth, and other identification documents. Essentially, KYC aims to prevent money laundering as well as fund terrorist activities, along with other unlawful practices.
Why Do Crypto Exchanges in India Need KYC?
The Indian government has made a request from all crypto exchanges to abide by the Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) regulations. The foremost intention for drafting such laws is to save the financial system, so it is not used as a conduit to facilitate an illicit purpose.
Below are a couple of key reasons why KYC is significant for Crypto exchange in India:
Prevention of Money Laundering: Money laundering may easily be described as concealing the origin of illegally earned money. In KYC, tracing the flow of funds and flagging the suspected transactions help to identify such criminals and make an exchange harder to use by money launderers.
Counter Terror Funding: Terror groups also use financial networks to collect funds and finance their operations. The metric of KYC can be applied to limit the use of cryptocurrencies by such groups in financing their operations.
Investor Protection: The implementation of KYC can safeguard investors from fraudulent practices. When inspecting customer identification, such exchanges can considerably reduce the possibility of people being duped in Ponzi schemes or other scams.
Compliance with International Norms As India is a signatory to the FATF, it is primarily bound to comply with policies adopted by this international governmental organization that formulates policies regarding anti-money laundering and terrorism financing. Financial institutions operating in India have to have suitable demands for Know Your Customer (KYC) in order to meet requirements defined by international standards.
Thus, the positive effect of KYC on the integrity of the market will enhance investor confidence while introducing real players in the ecosystem such that the likelihood of illicit activity in a cryptocurrency market becomes completely impossible.
Completing KYC on Binance India: A Step-by-Step Guide
Binance- The world's largest cryptocurrency exchange is very strict in KYC to follow all Indian regulations. Below is a step-by-step guide on how to complete the KYC process on Binance India:
1. Create a Binance India account and fill in all the basic information: Visit the Binance website, sign up with your email, and create a password to register your account. Now you've registered; check your e-mail and find the email verification from Binance which you will click and complete the step.
Once you have verified your email, sign into your account and fill out a profile by providing all information regarding personal identification, like name, date of birth, and any other details needed to complete the basic setup for an account.
2. Start the KYC verification process
Go to the Security section in your account and click on Identity Verification.
Choose India as a country you'll live in and click "Start Verification.".
3. Select Verification Level: The Binance offers two types of verification: Basic and Advanced. The type you choose will determine which features you'll have on the platform. For the most part, Basic will suffice for most.
4. Upload Required Documents: Upload the following:-
Government-issued ID: This can be your Aadhaar card, PAN card, passport, or even your driving license.
Proof of Address: This can be a utility bill, bank statement, or rental agreement as per your choice.
Ensure that the scans are clear, readable, and in supported format jpeg or png.
5. Apply for Verification: Fill up all the requirements needed in the account and submit these documents. After submitting these, you will apply for verification, which will take several hours or days, so you just have to wait and wait for your turn. They will notify you when it is all done.
6. Avail All the Platform Services: After you have successfully passed through the verification process, you ought to have access to all the features of Binance India, like buying, selling, and trading cryptocurrencies.
For More Information, you can take a look at the official Binance Identity Verification Guide
Things to be Noted while completing KYC:-
Make sure that the documents uploaded are valid and not old.
Make sure you check everything entered so that no error occurs.
If there is a problem during the verification stage, contact the Binance customer support staff to help you.
Just follow these simple steps to complete the KYC process on Binance India and start trading cryptocurrencies.
Conclusion
KYC is a highly important aspect of the cryptocurrency ecosystem in India. Because the exchanges require the identification of the customers, they inhibit money laundering and other forms of terrorism funding. Since there is nothing perfect, these practices also have certain shortcomings, but the benefits that go on by adopting them are well above the costs.
As the cryptocurrency market advances further, so should the need for an exchange in harmony between user privilege and KYC requirements.