Bitcoin Forum

Know-your-customer (KYC) and anti-money-laundering (AML) can become new regulatory standards for token distribution in ICOs. Why are they important? Let’s get into the details.

KYC relates to due diligence activities performed by a financial institution or regulated company on their customers’ identities. KYC is extremely important when it comes to customer integrity and probity. To facilitate KYC, financial institutions and regulated companies need to monitor any violations of their customers’ transactions.

KYC includes:
* Basic identity information, which is called the Customer Identification Program (CIP) (https://www.fdic.gov/regulations/examinations/bsa/ffiec_cip.pdf) in the US
* Checkup against the existing blacklists
* Risk evaluation in terms of fulfilling the commitments
* Monitoring of previous transactions

It’s important to know that KYC regulations can differ from country to country. For the differences, head over to the KYCMap.

AML is a set of actions designed to prevent illegal profit-making. To detect laundering techniques, countries are advised to follow the Financial Action Task Force on Money Laundering (FATF) recommendations. In terms of KYC, financial institutions and regulated companies are required to implement the local FATF procedures. Just like KYC ones, AML regulations can differ from one jurisdiction to another.

traditional businesses, governments and regulators require individuals to identify themselves in person, with a government-issued photo ID, fill out and sign forms. Banks, governments, regulators and other institutions claim that this KYC process is for our own protection

It is a good move to ensure that many whales investors have been filtered out. In my case, I see a good ico that they only want a single transaction investor, to avoid a whale buyer. So the whale cant rebuy the token because they can submit only one kyc and multiple account is prohibited.