Know your Customer (KYC) and Know your Business (KYB): Why it is important

KYC and KYB are both common phrases you will come across in the cryptocurrency world. Ever wonder why you need to submit a picture of your driver's license or ID? It’s to complete the KYC process. 

KYC is a process that financial institutions and other regulated entities use to verify the identity of their customers. The verification process is used to assess the customer's potential risks for money laundering or financing terrorism. Completing KYC typically involves collecting information about the customer's identity, such as their name, address, date of birth, social security number, and a photo of identifying documents (driver's license or passport). Depending on the situation, KYC can include details of a customer's financial history and potential sources of funds. Depending on what types of platforms you are using, you might be issued tax forms to file at the end of year as well. 

KYB, on the other hand, is a process that involves verifying the background of a business and its activities. This can include checking the business's registration and incorporation documents, as well as assessing the business's operations and financials to ensure that they are in compliance with relevant laws and regulations.

Both KYC and KYB are important for protecting the platform's users. These are proactive steps in preventing financial crimes and maintaining compliance with regulations.

A quick recap: while KYC focuses on verifying the identity of individual clients, KYB focuses on verifying the legitimacy of businesses. Financial institutions and other regulated entities typically use both processes to ensure that they are doing business with trustworthy customers and partners.