What is KYC & AML? Documents required for successful KYC identity verification


Recently when participating Invest in ICO projects or join in the exchanges To buy Token, you must encounter such phrases as: KYC, verify KYC, sign up for KYC or next to that is AML And this is also a required condition to participate in some Coin ICO projects. So in the end "What is KYC?","What is AML?”And what documents are needed to verify a successful KYC identity with ICO projects? This paragraph Virtual money blog Will be with you to find out.

What is KYC - Know Your Customer?

KYC stands for "Know Your Customer / Client"Does that mean"Understand customers"Good"Know who the customer is", Or in the crypto space you often call it"Identity verification“. This is a standard paradigm in the investment industry to ensure that investment advisers identify detailed information about client risk tolerance, investment knowledge and financial position.

Sample forms of KYC both protect clients and investment advisors. Thanks to investment advice from advisors, clients will know which investment best fits their individual circumstances. And investment advisors will know what customers can and cannot put in the portfolio.

KYC - Understanding customers

Rule Understanding customers (KYC) is an ethical requirement for those working in the securities sector, who are dealing with clients in opening and maintaining accounts. There are two rules outlined in July 07 that need to be implemented: Financial Industry Regulatory Authority (FINRA) Rule 2012 (Customer Understanding) and FINRA 2090 (Conformity). These rules apply to protect both the broker (Broker - Dealer) and the customer and for the broker (Broker) and the company to treat customers fairly.

The customer understanding rule 2090 stipulates that all brokers - dearlers should use reasonable efforts when opening and maintaining customer accounts. It is important to understand and keep a record of each client's essential data as well as determine authority to act on behalf of the customer.

KYC rules are very important when initiating a relationship with a client and broker (Broker) to establish the necessary data for each client before making any recommendations. The required data are data that are effective in servicing the client's account and any special handling instructions related to the account should be taken into account. In addition, the broker needs to know who will act on behalf of customers and the broker needs to comply with all the laws, regulations and rules of the securities sector.

Matching rules

Found in FINRA Fair Practice Rules, Rule 2111 accompanies KYC rules. Consistent Rule 2111 notes that a Broker - Dealer must have reasonable grounds when making recommendations that it is appropriate for the customer based on the financial situation and needs of the customer. This responsibility means that Broker - Dealer fully considers the customer's current data including other client's securities prior to any securities purchase, sale or exchange.

Set up customer records

Investment advisors and companies are responsible for understanding the financial situation of each client by understanding and gathering information on age, other investments, tax status, financial needs, experience. investment, investment period, payment needs and customer risk tolerance.

SEC (U.S.) requires new customers to provide detailed financial information including name, date of birth, address, employment status, annual income, net assets, investment goals and ID or Passport number Identify before opening an account.

What is AML - Anti Money Laundring?

AML stands for phrase Anti Money Laundring mean "Anti-money laundering”Refers to a series of procedures, laws and regulations aimed at preventing income generating practices through illegal action. Although anti-money laundering laws encompass a relatively large number of transactions and criminal acts, their implications are far-reaching.


For example, the rules about AML require credit card issuers or allow customers to open accounts to complete appropriate checks to ensure they are not a facilitator of money laundering. The task of carrying out these procedures is about organizations, not criminals or the government.

Solve "Anti money laundering - AML"

Anti-money laundering laws and regulations target activities including market manipulation, illegal trade in goods, corruption of public funds and tax evasion, and activities aimed at concealing these actions.

Illegal proceeds through actions like drug trafficking need to be cleaned up. To do so, money laundering runs it through a series of steps to make it appear like it has been earned legally. Once there is a record to show how the proceeds were made, the criminals hope it will not raise suspicion.

One of the most popular ways to launder money is to run it through a cash-based business legally owned by criminal organizations. Money launderers can also sneak money overseas to deposit deposits, deposit smaller amounts, or buy other cash instruments. The laundress usually wants to invest, and the broker will occasionally break the rules to earn bigger commissions.

It's up to financial institutions that issue credit or allow clients to open accounts to investigate customers to ensure they don't participate in money laundering programs. They must verify large sums of money from the source, monitor suspicious activities and report cash transactions in excess of $ 10,000. In addition to complying with AML laws, financial institutions must also ensure that clients are aware of these laws and guide people to them without a prior government order.

AML rules and regulations were recognized globally when the Financial Action Working Group (FATF) was established in 1989, setting international standards against money laundering. The purpose of enforcement groups such as FATF is to maintain and promote the ethical and economic advantage of a reliable and stable financial market.

What documents are needed to verify KYC and AML?


This is probably something that many investors are interested in when investing in ICO, I also encounter many cases verify identity KYC nostalgic but still failed or many people do not fully understand the requirements of the project on KYC. Below I will list the necessary documents that most ICO projects require you to send to them for approval:

  • Identity card (ID) or Passport (Passport)
  • Declare your full name according to the name on your ID card or Passport in the request form
  • Proof of resident address is valid for 3 months such as utility bill, bank, internet, ..
  • Driver's License (Many ICO projects you can use instead of ID)
  • Declare income from the beginning (Depending on whether the ICO project will love or not)

These documents are in Scan, meaning you need to take photos to prepare ready to upload for any ICO project that requires KYC verification, with your ID or Passport you take both the front / back, and some the project also requires photos "Take a selfie with your ID or Passport“. Each project will have a way sign up for KYC varies, but basically the documents you need to prepare are those above.


Above is the article "What is KYC & AML? Documents required for successful KYC identity verification"Hope to bring you the most useful information. This is also a necessary condition when participating in ICO projects, so if you are an investor and are investing in ICO coin projects, you should prepare in advance the above documents. If you found this article helpful please give Virtual money blog one Like, Share , and 5 star rating below.

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