Gaining approval to participate in pre and public sales is now viewed by many ardent ICO participants as a game. The price for admission is the time it takes to complete the KYC registration process and the chance that none of the countless ICOs they apply to will suffer a catastrophic data breach. As if investing in ICOS wasn’t risky enough, KYC requirements have ironically made crowdsales even more hazardous.
KYC stands for Know Your Client and is part of anti-money laundering (AML) regulations which have been in place for financial institutions for decades. KYC entails the verification of the identity and residency of each buyer to reassure investors that no funds are being raised from illegal sources, money laundering or groups with links to terrorist activity.
Many initial investors were attracted to blockchain for the level of anonymity it provided. Transactions using Bitcoin and other early cryptocurrencies could be carried out between strangers without identities having to be revealed. Therefore, some investors may perceived to be a weakening of anonymity by organisations implementing KYC and AML procedures. Currently, compliance with these procedures for organisations are voluntary. However, implementing these checks gives many benefits to both the organisation and its contributors because:
1) By implementing KYC and AML regulations from the initial token sale, it ensures that their platform is protected from potential fraud.
2) By being transparent with financial regulators from the start, we can avoid complications which could arise. Regulators can potentially freeze assets during an investigation if they suspect funds have come from illegal sources. By implementing KYC/AML checks, therefore, token buyers and sellers are protected from being denied access to their money.
Having said the above, database of investors are saved in a separate hosting, which is not link to any website and hence database is secured.
Ultimately, it’s in investors’ interest that KYC is carried out promptly.Feel free to join us on telegram to discuss any topics relating to icos/cryptocurrencies here:
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