What does KYC mean?


KYC, Know Your Customer, originated as a response to rampant fraud and money laundering in the traditional financial markets. 

  • The first requirements were established with United States regulation during the 1970s and have expanded on a global scale ever since.

  • These regulations exist as a way to reduce identity theft, prevent the movement of illegally obtained funds, fight the financing of terrorism and add a layer of customer transparency.

Adhering to KYC demands allows crypto exchanges like Backpack to operate freely in jurisdictions around the world.

  • Customers subjected to KYC requests must submit documentation to verify their full name, place of birth, date of birth, home address, financial statements and other personal identification records.

  • In the United States this includes submitting documents like passports, driver’s licenses, utility bills and birth certificates. 

Certain users may be deemed a high risk profile and are subjected to additional screening like video conferences to verify their documentation and identity.

  • All of this information is verified against international databases that track identities of sanctioned individuals, those convicted of financial crimes and other factors.

  • KYC is an ongoing exercise meaning that companies like Backpack continually monitor their platform for unusual or suspicious activity.