Things Related To KYC Norms For Ethereum Trading

Almost every country, actively participating in electronic money transactions has advised all its financial institutions to strictly follow certain customer identification procedure. The main purpose is to effectively monitor the transactions taking place and to report any suspicious nature to the concerned authority.

The compliance of financial firms with the standards like Anti Money Laundering and Combating Financing of Terrorism has indeed become necessary for international financial relations. A Master circular has been issued by the top monetary authority on ‘eKnow Your Customer’ or eKYC norm and Anti Money Laundering Act.

The main objectives of this circular include

  • To frame a policy based on recommendations from Financial Action Task Force and to abide by it
  • Prevent any kind of external elements from money laundering activities in a non-professional manner
  • To have a better understanding of its customers and their risk-free financial dealings
  • Create scheduled criteria for the customer acceptance
  • Establish steps to verify customer’s bonafide identity
  • Tracking of high-value exchanges especially that of immoral nature
  • To take appropriate measures against customers for conducting due diligence kind of transactions
  • Stick to the applicable law and regulatory guidelines
  • To constantly check whether staffs are well-informed and trained in norm procedures

The four vital elements of the eKYC policy include

  1. Procedures to accept a Customer:
  • Collecting data of borrowers including individual or firm to whom financial assistance is to be provided
  • Know about the investors who raise the financial resources
  • No dealings fictitious names or terrorist’s
  • No clients with criminal background
  • Necessary to submit filled-document
  • Timely verification is ensured
  1. Steps to Customer Identification:
  • Identity confirming documents are verified for maintaining financial relationships
  • It can be also performed during a transaction when the authenticity of the client is in doubt
  • Submit documents of address or location with photographs and signatures
  • Legal status of the client is also checked
  1. Regular Checking and Tracking of Transactions made
  • Considering the risk profile
  • Transaction records are preserved
  1. Effective Management Risk Elements
  • Reputation: This can be maintained only with the support of individual customers or investors
  • Compliance with banking operations
  • Operational failure due to any internal or external intruders or events
  • Internal Auditors make a regular check with regard to its functioning

This policy is made with regard to the welfare of customers and the soft copies or digital form is available as e-KYC which is important for online Ethereum trading. So read more about Ethereum Code and enjoy a successful and secure trading.