How Can KYC Secure Cryptocurrencies Transactions?

With an expected growth projection of nearly USD 24 billion for the blockchain market by 2023, the industry is all set to an exponential start this decade. The terms blockchain and cryptocurrency have had a symbiotic evolution. This has rendered them nearly interchangeable in usage. Nonetheless, we must understand what exactly cryptocurrencies are to understand it’s challenging.

Cryptocurrencies are digital currencies with purchasing and selling value. They use an online ledger and cryptography for secure transactions. With over 10,000 types, they are proliferating in many exchanges and have an estimated total value of more than USD 1.7 trillion as of June 2021.

They use blockchain technology eponymously. This makes them the most modern embodiment of economic advancement. Considering the potential cryptocurrencies have in terraforming the global economy, understanding the associated challenges and improving upon them is essential.

Challenges In The World of Cryptocurrencies

There is an increasing preference for cryptocurrencies in global transactions. The primary reason is the minimal involvement of bureaucracy. A more decentralized approach to monetary interactions also helps. But this can be useful as well as risky. The major challenges are faced during onboarding and include:

  • Financial Fraud
  • Money Laundering
  • Terrorist Funding
  • Government Regulations

Fraud, Laundering, and Terrorist Funding

Cryptocurrencies are used worldwide. Their regulations are different and oftentimes vague than state-issued currencies. Fraudsters are keen on utilizing this as a loophole. It helps them conduct illegal and fraudulent transactions. Cryptocurrencies can be used for money laundering and in some severe cases even terrorist funding. This is a dangerous aspect and regulating such activities requires a careful approach. 

Fraudsters may use false identities, stolen identities, or even shell entities. They transfer money in the form of cryptocurrencies from one international government jurisdiction to another. If not regulated, the entire industry can become a plethora of financial fraud and danger.

Government Regulations

To prevent fraud, cryptocurrencies are traded with stringent guidelines from many governments and authorities. These strict restrictions can severely impede the ease and speed of onboarding customers. It will also increase the minimum activation requirement alienating potential customers and traders.

Cryptocurrency Exchanges require government-issued identification verification along with good financial credibility for their customers. This makes the initial onboarding process heavily cumbersome. If better methods are not explored, the result would be wasted potential clients for the Exchanges.

Verification and KYC

Novel methods are developed to combat financial fraud in cryptocurrency markets. These methods can reduce any money laundering activities and prevent fraudsters from misusing the resources. Brokers consider ways to reduce the risk involved in onboarding a new customer or trader. Methods to verify an individual while avoiding any financial fraud is given below:

  • KYC- Know Your Customer
  • AML- Anti Money Laundering Measures


KYC helps establish credibility for the customer. This is done by checking their valid identity proofs and other background data. With advancing technology, it is mostly digital. For an industry using blockchain technology, it is only sensible to have efficient digitization of this entire process. Quality digital KYC helps stop all fraudulent or fake individuals from transacting. Thus, the danger is averted and risk is reduced.

AML Measures

Government agencies place Anti-Money Laundering Measures to prevent any form of financial fraud. Many countries might not have specific guidelines for cryptocurrency regulation. But many a time they fall under stringent AML measures. AML is mandatory to prevent any form of massive money laundering. If not complied properly, today’s resources can be used even for terrorist financing. As a matter of fact, measures for CFT-combatting finance of terrorism is a priority criterion for many institutions.

How Signzy Can Help You with Cryptocurrencies Transactions?

The advent of technology is making cryptocurrencies create a revolution in the industry. This makes it all the more needed to identify and verify the participants in the industry. Procedures like KYC and AML will only be effective if the appropriate guidelines are followed. Along with which safety measures need to be imposed. Nations are heading forward with this in mind.

But the catch is that, how do you fulfill all the criteria of regulations and safety while maintaining an easy journey for each customer? This is what we excel at.

We at Signzy give you customizable APIs and other resources that help you conduct safe and compliant KYC, AML, and all other requirements you have. We will help you onboard customers and traders of cryptocurrencies onto your platforms with ease and safety. Our seamless UI will make the journey all the more engaging. With the numerous products, services, and resources in our arsenal, we can make your enterprise better.

About Signzy

Signzy is a market-leading platform redefining the speed, accuracy, and experience of how financial institutions are onboarding customers and businesses – using the digital medium. The company’s award-winning no-code GO platform delivers seamless, end-to-end, and multi-channel onboarding journeys while offering customizable workflows. In addition, it gives these players access to an aggregated marketplace of 240+ bespoke APIs that can be easily added to any workflow with simple widgets.

Signzy is enabling ten million+ end customer and business onboarding every month at a success rate of 99% while reducing the speed to market from 6 months to 3-4 weeks. It works with over 240+ FIs globally, including the 4 largest banks in India, a Top 3 acquiring Bank in the US, and has a robust global partnership with Mastercard and Microsoft. The company’s product team is based out of Bengaluru and has a strong presence in Mumbai, New York, and Dubai.

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