What is KYC and why does your ICO need it?

Tokedo
Tokedo
Oct 15, 2018 · 3 min read
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If you make rounds on the different ICO listing websites you will often stumble upon the acronym KYC.

But what’s the KYC process and when is it necessary? Some ICOs require it some don’t.

KYC stands for Know Your Customer, a service that makes background checks on your clients. It is something that institutions like insurance companies and banks have always been doing.

While at the beginning of the ICO craze there was more of a wild west mindset, the whole business is now moving towards a more regulated age.

The push comes also from national governments and agencies, that are tightening the grip around cryptocurrencies and token offerings.

KYC is necessary in order to prevent money laundering and other frauds, and conducting proper KYC is in the interest of the ICOs as much of the buyers.

This being said, KYC can be a friction factor for potential ICO buyers, who are prevented to join a token sale until they complete their verification. This procedure often requires uploading pictures, IDs and other documents (in the right format!) and then wait for them to be verified (something that can take days or even weeks).

In order to verify their buyers, ICOs need to partner up with a KYC provider. There is a number of KYC services out there, some better than others. Among these providers, a tool that offers a complete service is without a doubt Atomax. Atomax is a cryptocurrency wallet that provides its users with a built-in KYC system. What differentiates Atomax’s KYC from others is a series of turnkey features:

1) First buy, then verify

This is probably the most break-through feature of Atomax’s KYC service. Thanks to an innovative system, users can participate to ICOs instantly, and send the desired amount of funds to the token sale. This removes any barrier between the potential buyer and the actual purchase. It’s an optimal solution for ICOs, who can now count on a fast on-board of their buyers and minimize drop-outs.

Anyway, in order to ensure the verification of the user, his funds stay locked until he completes KYC. Only after proper verification can users receive their tokens, and the ICOs receive the funds sent.

2) Complete KYC, get airdrops (all inside the same app)

Atomax Wallet has a KYC tab where users can complete KYC procedures within the app itself. It is practical and easy. Atomax KYC comes in 4 tiers, that require to verify an increasing amount of documents. Higher is the sum a user sends to an ICO, higher is the tier he needs to complete. By just completing level 1 KYC though — which only consists of a verified email — and by verifying their phone number — users are eligible to claim all airdrops promoted on Atomax. In fact, Atomax periodically offers to its verified users a number of selected airdrops from various token sales. A nice perk for users and a good way for token sales to make their project known to a community of potential buyers.

3) Verify once, access always

This feature is probably one of the most liked by Atomax users. We already discussed how tiring it is to upload documents, pictures and whatnot, and then wait days for all your stuff to be verified. Now imagine doing this every time you want to join a new ICO. Atomax allows its users to use their verified status to join all token sales that employ Atomax KYC, no need to send documents and no unnecessary waitings.

Beside its KYC feature, Atomax is a good cryptocurrency wallet, specifically designed for the token sale world. It meets the needs of participants and ICOs as well. If you want to know more about Atomax and its services for ICOs check out the website.

Atomax is part of the Tokedo Ecosystem, together with the Token Creator and the Tokedo DEX, which — once integrated inside the Atomax Wallet — will allow users to trade within the wallet app itself.

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