Know Your Customer (KYC) checks may take a few more minutes when signing up for a financial platform, but the benefits they offer are worth every second of it. That said, if you’re wondering why crypto platforms, such as the best crypto app for beginners, have KYC, or if you submitted documents for a KYC check but failed and are looking for tips to pass, this article is for you.
What Is KYC?
KYC is a mandatory customer identification process that financial institutions conduct before allowing clients to open an account with them or use their platform. It aims to prevent money laundering, financing terrorism, fraud, and other illegal activities. Financial institutions may refuse to open an account for a person if they fail the KYC process.
What Does KYC in Crypto Mean?
Crypto platforms, such as crypto exchanges, wallets, and payment apps are regulated as financial institutions, which is why they’re also required to incorporate KYC checks in their AML (anti-money laundering) measures or those laws and regulations that prevent individuals from illegally obtaining money and converting them to legal income. In addition, KYC allows crypto companies to confirm the identity of their users, verify their legality to use their services, and assess a user’s propensity for money laundering and other financial crimes.
What Are the Benefits of KYC in Crypto?
Although KYC checks require additional steps in a crypto platform’s sign-up process, they also provide significant benefits both for crypto companies and the users such as:
- Increased trust and transparency between companies and users
- Less scamming, fraud, identity, theft, terrorism financing, and money laundering incidents
- Reduced legal and regulatory risks
- Contributes to the crypto market’s overall stability and growth
What Are the Risks of Using a Crypto Platform Without KYC?
Using a crypto platform without proper screening or KYC may expose you to the risk of permanently losing funds in the event of fraud or scamming. And for awareness purposes, some fraudsters sell approved crypto exchange accounts or credentials on dark web markets to people who want to skip KYC in an exchange for around $150 to $500. Since these so-called approved accounts are also accessible on their end, victims sometimes lose hard-earned assets altogether
Is Crypto KYC Safe?
KYC is generally safe, assuming that the crypto company or project you’re dealing with has security and privacy policies in place to protect your personal information. Ka.app users don’t have to worry about their safety as we treat customer data as strictly confidential, and we also use security tools to protect them.
Scammers may use KYC as a tool to seal information, sometimes through phone calls or suspicious links, so remember to be vigilant and only provide KYC requirements directly to the crypto company you’re transacting with.
What Is the KYC Process in Crypto Exchanges?
Every exchange has its own specific KYC process before a user can successfully create an account in their platform and use their services. But generally, the process involves the following steps:
- Collection of a user’s personal information, including their full name, address, date of birth, and phone number using a digital form
- Asking the user to upload proof of identity and proof of address documents
- Taking a selfie
- Validation of the user’s proof of identity and proof of address documents
Crypto Exchanges That Don’t Have KYC
Some no KYC crypto exchanges exist, although many of them have smaller withdrawal limits for a certain period of time. Some crypto exchanges that don’t require KYC at a certain level include:
- ByBit (No withdrawal limits)
- Binance (unverified accounts can only withdraw up to 0.06 BTC in 24 hours, while Those with verified accounts can transfer up to 100 BTC in 24 hours)
- Kraken (up to $5,000 per hour without KYC and $1,000,000 per hour with KYC)
- KuCoin (up to 5 BTC in 24 hours without KYC and 100 BTC in 24 hours with BTC)
- SimpleFC (No withdrawal limits)
Do You Conduct KYC Checks in Ka.app?
Yes. Ka.app, the crypto payment app supported by the KASTA token, has two levels of KYC verifications.
KYC Process in Ka.app
Level 1: Identity Verification
A user is required by law to verify their identity to perform any monetary transactions in a crypto platform like Ka.app. Level 1 usually prompts during the sign-up process. Passing level 1 of KYC allows you to create a Ka.app wallet, send, receive, deposit, withdraw, and swap crypto and Bitcoin in transactions up to €14,000.
To verify your identity, you need to provide your personal information (name, address, phone number, etc.) in the app; upload an identification card and proof of address document, and then take a selfie. Ka.app’s KYC partner will validate the documents and information provided as part of the KYC onboarding.
Level 2: Proof of Funds
Meanwhile, if you need to send crypto or receive assets worth more than €14,000, the app would lock your account and ask you to (i) provide Source of Funds information and documentation or (ii) complete the “Source of Funds Declaration” form to access your assets. This process would require proof of funds, (e.g., your monthly income, salary certificate, bank certificate, bank statements, screenshot of exchange account displaying account details etc.)
Ka.app will determine whether you’re eligible for transactions over €14,000 or not based on what data you’ve provided with the required Source of Funds information.
Acceptable Identification Documents in Ka.app
Ka.app only accepts the following documents for identity verification. The document must contain an image of yourself as our AI will match your selfie with your ID photo.
- Driving license
- Identity card
Acceptable Proof of Address Documents in Ka.app
Meanwhile, you can upload any of the following proof of address documents:
- Bank statement
- Credit card statement
- Employer’s certificate for proof of residence
- House purchase deed
- If renting, the current lease agreement with your (the tenant) and the landlord’s signatures
- Letters from a recognized public authority or public servant/any government-issued correspondence
- Utility bill for electricity, internet, water gas, or any other billing linked to your property
The app may also accept any of the following documents for proof of address but only if they contain your address in them:
- Driving license
- Identity card
How to Avoid Failing KYC in Ka.app
Ka.app follows a simple KYC process. However, our KYC partner is very strict in the quality of the documents they accept for verification, so be sure to follow these tips to avoid failing KYC in Ka.app:
- Upload valid documents that are clearly readable and are no more than 3 months old.
- Be sure that the entire document is visible, not just a part of it (e.g., upload your entire billing statement, not just the part that shows your name and address, etc.)
- Use a high-quality camera when taking a selfie or scanning your document. Avoid using a laptop or desktop camera as the image may come off blurry or of poor quality.
- Don’t take a photo of a PDF through your computer screen or even take a screenshot. Instead, upload the document directly into the app to ensure quality.
- Ka.app follows a simple KYC process. However, our KYC partner is very strict in the quality of the documents they accept for verification, so be sure to follow these tips to avoid failing KYC in Ka.app:
We hope this guide has helped you appreciate the importance of KYC as it’s a crucial security measure that benefits both crypto companies and their users.
Meantime, if you failed KYC in Ka.app despite following the above-mentioned tips, please reach out to our customer support team through the app’s live chat support for assistance. We try our best to provide a solution within one working day.
Do crypto wallets need KYC?
Custodial crypto wallets, or those with private keys regulated by a third party, are now required to conduct KYC verifications. However, many non-custodial crypto wallets, or those where users have sole control of their private keys, still mandatorily perform KYC checks for the benefit of their users.
Do you need KYC to cash out crypto?
It depends on which platform you use. Some platforms require an extra KYC check for large withdrawals, while others don’t. Ka.app has another KYC for transactions over €14,000
Can I Purchase Crypto Without KYC?
It is possible to buy crypto assets without going through KYC checks. For instance, Bitcoin (BTC) ATMs and decentralized exchanges (DEXs) don’t perform KYC. BTC ATMs allow users to buy BTC in cash or using a card, while DEXs enable large-scale crypto trading using automated algorithms instead of a financial intermediary.