KYC: A Brief Overview

As the digital era continues to evolve faster than anyone can predict, banks and financial institutions have started to realize the value of knowing the identities of their customer well before financial transactions occur. KYC (Know Your Customer) processes have become one of the most important tools to verify client identities. KYC processes limit and deter clients from engaging in unethical financial transactions, including the funding of terrorism and money laundering practices. KYC processes are now mandatory in most of the financial markets around the world.

The KYC process in general consists of collecting some very basic data about the customer (including name, Social Security number, address, and pictures) in an aim to verify the details with previously established records. If any link to an unethical financial or criminal activity is found during the KYC process, a company will block all of the client’s transactions, and alert the government or other law enforcement authorities about the so that the proper actions can be taken.

KYC procedures have recently grown stronger by incorporating sophisticated digital technologies that identify and segregate criminals from the general population so that financial crime can be stopped or restricted automatically.

Blockchain KYC: Stronger Compliance and Authentic Verification

Blockchain is a superior way to transact, as it allows its users to transact in a completely trustless and transparent manner. The absence of any central mediator between the transacting parties makes Blockchain economical, and eliminates the risk of a single point of failure.

Blockchain technology is being applied in digital contracts, KYC processes, security settlements, and other peer to peer services. The movement of assets (including cryptocurrencies) from one entity to another requires that ledgers be adjusted accordingly. A blockchain network automatically updates its own ledger with 100% accuracy and efficient record-keeping.

Though Blockchain technology has evolved over time, KYC & AML in the blockchain space is still nascent in terms of use and applications. As the KYC process contains the movement of information and identity, and may involve multiple parties, using blockchain as custodian is beneficial in more than one way.

The blockchain is a truly immutable shared ledger of transactions run by a network of computers, and as such, does not need a centralized authority. It can potentially be used to create a shared valuable source of data while reducing procedural errors. Therefore, blockchain-based KYC procedures are gaining ground faster than initially presumed.

Blockchain can be a golden resource to help financial institutions in establishing the identities of their customers, matching details such as the source of funds, business profiles, history of transactions, and more. It can also be used to monitor the legal status of parties involved along the way.

Every financial institution performs its KYC processes individually, and uploads the obtained sets of information and documents to a central registry. In these systems, one unique identification number is given to each customer. Therefore, KYC helps each organization in performing due diligence whenever required, and blockchain can come in handy in such a situation.

The availability of a blockchain-based registries removes the need or existence of effort duplication in carrying out KYC checks. A blockchain-based ledger enables encrypted updates of client details in near real-time. Blockchain-based KYC systems can also provide all historical records of the documents shared, and the necessary compliance activities are undertaken (if any) for each client. This is a great advantage, as the use of time and resources is minimized to optimum standards in the regulation process.

The CINDX KYC Process: A Modern, Technology-Backed Method to Make Compliance and Security Ubiquitous

CINDX allows managers and investors to handle cryptocurrency funds easily, by offering all interested parties an investment management platform which primarily deals with cryptocurrencies.

The technology used on the CINDX platform helps investors copy deals or trades of successful asset managers without having to send any pre-process funds. Investors registered on the CINDX platform can choose several investment products from the marketplace, and invest in them digitally without ever having to send their money to a third party.

Because the crypto space is continually being heavily invaded by various kinds of frauds and money laundering schemes, CINDX has decided to apply a blockchain-based KYC process. CINDX has partnered with Sum & Substance, one of the current market leaders in online verification and KYC/AML industry in Central and Eastern Europe, as well as in Asia.

Sum & Substance is an industry leader in compliance management including both KYC and AML processes, with vast legal experience in blockchain, infrastructure, and GDPR compliant processes. Additionally, it also meets the requirements of US and local Asian data security and protection laws, and offers the fastest performance in the market, with a large number of security checks suitable for large numbers of users.

Sum & Substance will send all CINDX KYC applications through encrypted channels to a Tier 3 data center. This ensures a very high level of protection. Sum & Substance has also designed unique solutions for the remote verification of documents and users, such as automatic picture recognition.

CINDX believes in creating a cryptocurrency investment assistant platform in which crypto investors can register, open an account, select a crypto portfolio Manager, and enjoy the automatic copying of the asset manager trades to benefit from maximum growth in the value of their funds.

This process requires a formal and statutory KYC compliance in order to make the platform more authentic and compliant to all governing due diligence matters. Therefore, CINDX believes that its blockchain-based KYC compliance procedure can help the platform become more transparent, legally compliant, and ethically profitable for all cryptocurrency investors and stakeholders.

About CINDX

CCINDX is an investment platform that allows individuals to combine several crypto exchange accounts into one trading terminal, and gives them the option to connect to the best managers without having to transfer their funds. Moreover, implementation of blockchain-based transactions will allow the trading history to be saved, and a rating system will be used to differentiate the successful managers from the less successful ones.

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