KYCKnow Your Customer
The principle and processes for knowing a customer, including establishing and verifying identity.
What does it mean?
English expansion: Know Your Customer
The principle and processes for knowing a customer, including establishing and verifying identity.
How is this concept used?
KYC connects a service relationship to an identified customer. It can involve collecting identity information, checking its reliability and clarifying who is acting on whose behalf. The process depends on the service and applicable rules. A blockchain address is not, by itself, a verified human identity.
Documented examples
Documented example
Bitzlato: identity checks (2023)
The U.S. DOJ's 6 December 2023 notice reported Bitzlato founder Anatoly Legkodymov's guilty plea to operating an unlicensed money transmitting business. It also described minimal identity checks and registration using other people's information, illustrating KYC's focus on verifying the actual customer.
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Documented example
BTC-e: credentials and identity (2017)
In its 27 July 2017 civil-enforcement notice, U.S. FinCEN found that BTC-e collected little customer information beyond a username, password and email address. The finding illustrates the difference between creating login credentials and verifying the customer's identity.
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Connection to a wallet report
Combine identity information and wallet findings only through an appropriate review process. A wallet risk result cannot verify a passport, identify every beneficial owner or prove who controls an address.
A common misconception
Possessing an address or receiving a low risk score is not identity verification.
Related reading
Put the explanation in context
When you need a wallet report, open the application and follow its normal account and scan process.
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