Navigating The Complexity of Ownership From The Lens of Sanction By Extension

Download Whitepaper cross

We see you are from -

We offer parity pricing to make our services accessible beyond borders. 


A Comprehensive Guide to Business Verification in the Crypto Industry

17 November, 2023

blog_image blog_image

Business verification is an important aspect of the crypto industry as it is prone to fraud. Many of the B2B interactions require complete verification before entering new partnerships. In cryptocurrency, top players operate with high transactional value and offer services to other businesses instead of individual customers. So it has become crucial to perform complete business verification to prevent money laundering and other digital financial crimes. 

According to the US Federal Trade Commission (FTC), over 46000 people filed fraud cases reporting $1 billion in losses in crypto scams in 2022. Besides individual fraud, over 19% of B2B merchants report fraud during online transactions. This is where business verification solutions can help firms avoid these hefty losses.

This blog will discuss the importance of business verification in the crypto industry, how it impacts business performance and its core advantages for crypto firms. 

What is Business Verification for Crypto?

Business verification is a core process in the crypto landscape. It refers to verifying each aspect of your company detail, from legal name to operating address. Big tech giants like Facebook or Meta, which are sole supporters of digitization have implemented strict customer and business verification checks. As these giants seek to strike the perfect balance between security and compliance, they use sophisticated business verification solutions. 

For starters a Know Your Business (KYB) verification solution empowers organizations to validate B2B clients on the go. It performs a complete real-time registry search from global repositories to provide instant access to real-time information on crypto firms, the coins they operate in and the exchanges they are affiliated with. Using AI KYB verification allows firms to automatically screen new businesses with sanction lists.

How KYB Crypto Help Firms

Business verification for cryptocurrency or simply KYB Crypto is an integral part of most businesses operating in the digital landscape. It provides several benefits to companies. Some of them are explained below: 

Regulation Compliance

With the increasing risk of crypto fraud, authorities are making strict policies to regulate the digital currency sector. For instance, the US announced a complete crypto framework in 2022, handing power to market regulators like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). After which these bodies have started scrutinizing businesses and exchanges that do not comply with cryptocurrency regulations. Business verification helps in regulation compliance by automating complex business screening procedures. It is a game changer for firms that fail manual compliance leading to restriction of operations. 

Business Onboardings

Onboarding a new client is a challenging task especially if your business does not meet the required business verification protocols. In the cryptocurrency space, every new business needs to have a secure onboarding channel which validates client information completely. Employing business verification solutions that fulfil regulatory obligations and streamline onboarding processes reduces the cost, time and manual paper-based interactions. It screens the business executives from legal databases to validate their ownership details and establish credibility before onboarding them as a client or new partners. Also, with up-to-date business data, firms can easily make decisions for future operations.

Fraud Prevention

Speaking of future operations and decision-making. KYB regulations are in place to help businesses fight fraud. In the cryptocurrency space, it is integral to have a complete transaction processing system that complies with international laws. With business verification firms such as financial institutions, crypto exchanges and trading organizations can easily verify the company they are dealing with. This ultimately reduces fraud as KYB checks highlight all the crucial business insights for that particular entity. 

Business verification eliminates the shell company fraud that causes losses of millions of dollars every year. According to the UK Parliament report, £4.9 billion was lost to fraud during Covid-19. Business verification proves to be a lifesaver for businesses as it significantly reduces fraud attempts, filtering out bad actors from the ever-evolving crypto market.

Expand Global Reach

As there are many prominent players in the crypto market. Making your mark can be difficult in the beginning. It becomes even more challenging if your business lacks a KYB onboarding solution. Fraud can hinder growth and even conclude a new business venture in the highly volatile crypto industry. Employing business verification can help in this regard as well. By complying with global regulations, especially in the crypto sector which is highly competitive, firms can build a secure and reliable reputation that contributes to the expansion of their global reach. 

The KYB crypto checks enable organizations to fully understand the risks posed by digital currency trading. This allows stakeholders to make well-informed decisions and add more trusted clients and partners to their crypto journey.

Also read: UK Discloses Final Proposal to Regulate Crypto Trading Businesses

Automated AML Checks

Money laundering is a serious issue globally and the cryptocurrency sector is no different. Fraudsters now find it easy to launder money using crypto exchanges as many of them do not verify the source it is coming from. This causes millions of dollars to be moved without any authority noticing it as cryptocurrencies follow blockchain networks. This is a major challenge for businesses stepping into the crypto market as bad actors can exploit their networks for illicit purposes and money laundering. 

A simple yet effective business verification solution can safeguard from all these prevailing issues. With modern KYB solutions, firms can automate their AML checks to protect their crypto exchanges against money laundering. Above all, the whole process is fully automatic, meaning that businesses don’t need to have a money laundering compliance department in place. 

Final Thoughts

Cryptocurrency is one of the leading markets in the modern business world. The addition of new coins and technology is making it more and more competitive every day. But fraudsters also find it easy to exploit these networks using fake identities and shell businesses. Business verification is a key process to evaluate every business entity operating in the crypto space, providing a whole lot of benefits. From regulatory compliance to money laundering protection, firms can streamline their crypto dealings using sophisticated KYB solutions. 

Contact us to learn more about KYB Crypto solutions and how they can put your business ahead of most crypto exchanges in the market.

Read more: The KYB | Building Trust Among Businesses Through KYB Verification

Latest Posts

15 June, 2024


BOI Reporting: Mitigating Non-Compliance Challenges in Corporate World

05 June, 2024


Top 5 Signs Indicating Trade-Based Money Laundering

31 May, 2024


What is Corporate Compliance? A Comprehensive 2024 Guide

Recent Blogs

BOI Reporting: Mitigating Non-Compliance Challenges in Corporate World
Top 5 Signs Indicating Trade-Based Money Laundering
What is Corporate Compliance? A Comprehensive 2024 Guide