The easy way to verify identities on a crypto exchange
The ongoing crypto trend shows no signs of slowing down, as more and more people are choosing to invest in various cryptocurrencies and consequently engage in crypto exchanges. Since its inception, crypto has been appealing thanks to the heightened level of security offered by the blockchain.
But this security only works when you’re sure you know exactly who you’re exchanging with. Crypto scammers were able to steal a record $14 billion in 2021 alone by manipulating cryptocurrency owners into questionable exchanges.
Thankfully, there are easy ways to verify identities before you initiate a crypto exchange.
Using Compliant Crypto Service Providers
Crypto is now recognized as a financial service by the European Union, and heightened regulations on crypto in America could be on the horizon. Because of this classification, any company providing crypto services in the EU (which is the majority of larger entities due to crypto’s worldwide standing) must comply with both AML and KYC procedures.
AML stands for Anti-Money Laundering, meaning service providers have to ensure sufficient checks are in place to prevent money laundering through their services. KYC is more relevant to identity verification and refers to Know Your Customer. If you’re worried about the identity of someone you’re exchanging with, it’s essential that you use a service that is fully KYC compliant.
As such, it’s imperative that you make sure you’re using a system that has advanced support for KYC/AML for Crypto Exchanges and Wallets before you engage in any transaction.
Additional Measures You Can Take To Verify Identities When Exchanging Crypto
Working within a service that is both KYC and AML compliant is the easiest way to make sure you can verify the identity of another person when exchanging crypto. This approach should always be your priority, but there are additional preventative measures you can take to avoid being scammed.
You should do your own research into any individual or company you’re looking to exchange with, particularly if they contact you first. Just like with regular banking exchanges, you should never share any of your private key or seed phrase information with anyone else, even if it’s someone you already know.
If you are using KYC/AML compliant services, you should take advantage of their additional authentication or verification features. These can include sophisticated video identification tools or more traditional security measures like two-factor authentication.
Finally, if something doesn’t feel right, it’s often better to take a moment, fully assess the situation, and if you’re still concerned simply don’t exchange.
Points to Remember When Verifying Crypto Identities
Ultimately, the securest way to verify identities on crypto exchanges is by using reliable, KYC/AML compliant services. It’s wise to avoid using any additional service until you’ve fully researched it beforehand.
If you’re still unsure, it can be worth looking up the financial authority relevant to your specific country of origin, as well as the origin country of any services provider you’re working with.
As long as you keep informed and take the time to find the right providers for you, there are ways to safely identify people before ever exchanging your currency.
