Regulations for conducting AML checks and KYC policies

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Regulations for conducting AML checks and KYC policies

KYC verification: what is it and where is it used?

What is a KYC procedure and why is it receiving so much attention? We tell you how she can protect you from scammers while maintaining anonymity. KYC and AML checks: why identity verification is needed in the cryptocurrency sphere. KYC (Know Your Customer) is a procedure for verifying a customer's identity and assessing potential risks from it. But why is it needed and why is it almost impossible to buy cryptocurrency today?, without confirming your identity? Doesn't this contradict the original principles of anonymity? and decentralizing the crypto industry? Today we will look at what AML and KYC checks are for. and how they work. We will also tell you how verification will help reduce the number of scammers., while maintaining the basic anonymity of users.

The exchange office has the right to request KYC verification in case of suspicion: Transactions related to money laundering; Transactions involving income generation as a result of terrorist and criminal activities; Transactions involving income generation as a result of drug trafficking transactions; Transactions related to trade operations with countries with which the current legislation International trade is prohibited; Transactions that involve generating income from any other illegal activity.

What is AML and what is it used for?

Anti-Money Laundering – a set of anti-money laundering measures, financing of terrorism and the creation of weapons of mass destruction. This procedure includes identification, storage, and mutual exchange of customer information., their profits and transactions between financial institutions and government agencies. Most classical financial institutions use AML measures for business verification, working with cash or using cash as one of the main assets. They also check those businesses that have money in different accounts., They regularly transfer them to other countries and banks, buy futures and other instruments. for cash payments. In other words, all businesses are subject to verification., which can potentially circumvent financial monitoring and launder funds.

What does address verification show?

Total risk (in percent) is the probability that an address is associated with illegal activity. Sources of risk are known types of services that the address interacted with., and the percentage of funds accepted from / given to these services, for which the total risk is calculated.

Why do services insist on AML procedures?

If the service does not carry out such checks, then scammers can use it as a platform. for money laundering and terrorist financing. And then the service itself will be held accountable. That is why exchanges and other large cryptocurrency companies implement AML requirements. They invest in their business and carry out regular KYC verifications.

How is risk assessment understood?

0-25% is a clean wallet/transaction;
25-75% is the average risk level;
75%+ − such a wallet/transaction is considered risky

The risk is more than 50%, but I am sure that the address is reliable. What should I do? The verification results are based on international databases, which are constantly updated. Therefore, an address that had 0% risk yesterday could receive or give an asset to a risky counterparty today. In this case, the risk assessment will change.

What should I do when funds are blocked?

To confirm the origin of the funds, we ask users to answer the following questions:

which platform did the funds come from? If possible, please provide screenshots from the withdrawal history of the sender's wallet/platform, as well as a link to the transaction in the browser
for which service you received the funds;
amount, date and time of the transaction;
through which contact person did you communicate with the sender of the funds? If possible, please provide screenshots of the correspondence with the sender, where we can see the confirmation of sending funds.
screenshots of the withdrawal from the platform from where the counterparty transferred funds to you, on which the transaction details will be visible.

In case of a refund based on the results of AML/KYC procedures, the service has the right to deduct a processing fee of up to 5% of the refunded amount, but not more than $ 100.

Refunds are only possible for customers who have passed KYC and are not related to money laundering or other violations of the law.

No refund is provided for users who have not confirmed their identity or are found to be involved in illegal activities.