In today’s era, financial technology has evolved by leaps and bounds, and KYC (Know Your Customer) has become a common term on mobile banking applications. It is an important security process for regulated financial platforms, which means that KYC is often required on centralized applications and platforms to comply with government regulations.
Why KYC is Needed?
The primary goal of KYC is to prevent activities such as money laundering, fraud, and other financial crimes by requiring platforms to verify the identity of their users. Most licensed platforms require users to complete KYC, and the process has become so standardized that a platform operating legally or under regulatory oversight will almost certainly require KYC.
Benefits of KYC
The core benefit of KYC is to enhance user security. For example, if there is fraudulent activity on a user’s account, the platform can identify the perpetrator through KYC data and take timely preventive measures. For example, if a user detects a suspicious transaction and immediately reports it to the exchange’s customer service, the platform can lock the fraudster’s account to prevent further unauthorized activity.
In addition to preventing fraud, KYC also makes it easier for law enforcement agencies to track and identify criminals, as regulators can track fraudulent activity and prosecute if necessary. This is one of the mandatory measures that platforms must follow to ensure account security and compliance with legal regulations.
Risks of KYC
Along with the security benefits, KYC also comes with potential risks. Personal information provided for KYC such as national ID numbers, passport details or other forms of identification can be exposed if the platform is compromised. When information is leaked, the consequences can be serious, such as being used by criminals to commit online fraud or identity theft.
Do's and Don'ts
If your data is leaked, fraudsters can use your personal information to conduct illegal transactions, which can lead to criminal investigations targeting the original KYC holder. Therefore, users need to check the reputation and security of the platform before providing personal information. Keeping KYC data safe is always a top priority, and choosing platforms with a strong security history can minimize this risk.
Challenges in Vietnam
In regions like Vietnam, where certain types of documents are vulnerable to forgery, KYC systems face greater security challenges. Forged documents can allow malicious users to create multiple accounts, attempt to bypass restrictions, or conceal illicit transactions. However, platforms like Binance have increased verification measures to ensure the authenticity of documents submitted from countries with a history of document forgery. As technology advances, biometric verification, such as facial recognition, is also being used to enhance security.
Complete KYC In Vietnam
Completing KYC typically requires users to provide one of three main types of documents: a national ID, passport, or driver’s license. These documents help platforms verify a user’s true identity. Additionally, the KYC process includes taking a photo of the user holding the ID, which helps prevent the sale of KYC-verified accounts.
Things to Avoid
If you buy a KYC-completed account, you risk losing access if the platform requires facial authentication again, as only the original account owner can match the KYC profile. Those who attempt to buy or sell KYC-verified accounts not only violate the platform's policies, but can also have their accounts locked and lose their funds.
Furthermore, selling your personal KYC information can have more serious consequences. If you sell your KYC information to someone and they then use it to commit illegal acts such as money laundering or fraud, the authorities will be able to trace your identity back to you, leading to potential legal issues. This highlights the importance of keeping your KYC information secure, as giving your identity information to someone else is like handing over your entire digital identity.
Conclude
While KYC provides multiple layers of security for users, it also requires caution. Users should choose reputable platforms with strong security protocols before providing personal information and avoid using their KYC for third-party purposes. Only using your own credentials on trusted platforms will minimize risk, ensuring that the KYC experience enhances, rather than compromises, your security.