KYC in the Crypto Space: Time Wasted on User Onboarding

The cryptocurrency space is volatile: one day prices are falling and the next they are soaring by 10–20%.

For investors, traders, and crypto enthusiasts, this means that the speed with which they enter the market and take action could be the difference between a profit and a missed opportunity. But if you’ve been around the game long enough, you know that opening and fully verifying an account isn’t simple anymore.

With demand skyrocketing, exchanges were forced to close doors

In December 2017, the cryptocurrency users experienced first-hand how costly onboarding processes could be. At the time, Bitcoin and other altcoins were making weekly all-time-highs (ATH), and there was a general frenzy to acquire them before prices “mooned.”

However, users were in for a rude awakening: exchanges did not have the infrastructure in place to onboard thousands of users.

You’d think that a massive influx of new customers basically begging to spend their money would be the dream of every business. Unfortunately, that wasn’t so for a number of cryptocurrency exchanges last December.

A handful of them stopped accepting new customers until they could handle their existing clients, Prior to doing so, Binance had reported an estimate of 250,000, while exchanges Coinbase and Kraken managed 100,000 and 50,000 daily registrations respectively.

In turn? New users missed out

With doors temporarily closed on new entrants, hundreds of thousands of traders were left with fewer options, much to the detriment of the users and exchanges alike:

“We have received an enormous number of new account registrations over the past few weeks. Unfortunately, we have to make a few upgrades to our support and backend systems to handle the increased traffic and load.” — Bittrex

“Thank you for your interest in opening a Bitfinex account. However, due to extraordinary demand, new account creation has been temporarily paused,” — Bitfinex

“Every day, an enormous number of users registers on our exchange, which we are extremely excited about. At the same time, this has been putting additional pressure on our support and verification teams.” — CEX.io

For these unlucky new users, these issues may very well have cost them profits.

After all, what’s the point of getting verified if you miss out on a mouth-watering deal by doing so? In KYC processes, delays are the ultimate frustration; if you can’t get validation when you need it, you might as well not get it at all.

And on the side of exchanges, consider the fees they missed out on from the trades not made by rejected users. Once again, time-consuming user onboarding is a definite lose-lose across the board.

December may have passed, but the problem is perpetual

Don’t mistakenly dismiss this issue as a thing of the past.

Current market prices aside, what happens when the market spikes again and everyone tries to get a piece of the pie? Without a doubt, traders would face lengthy onboarding times (as long as 26 days, even) and cryptocurrency exchanges would again halt new registrations.

Traditional onboarding processes are becoming longer and more expensive due to ever-changing and overlapping regulations. Exchanges, ICOs, and financial institutions in general shouldn’t allocate so much of their time and resources to customer verification and data storage — it’s simply impractical.

The bottom line: current onboarding processes are grossly insufficient in meeting the rising need for compliance in the cryptocurrency world.

About Clears

Clears aims to be the standard KYC in the rapidly growing ICOs, Fintech and Cryptocurrency marketplaces, expanding to serve all industries that require identity checks and KYC processing. We are confident that users will specifically request that Clears processes their KYCs due to its convenience and enhanced security.

Learn more at http://clea.rs/

Join us now!