KYC — Know Your Customer — is the process of verifying who a customer is before doing business with them: collecting an ID document, matching it to the person, screening the name against sanctions and politically-exposed-person lists, and assigning a risk level. For crypto businesses it isn’t optional; it’s the entry requirement of the anti-money-laundering (AML) regimes they operate under.
What a typical crypto KYC flow looks like
- Document capture — the user photographs a passport or ID card; software checks it for tampering and reads the data.
- Liveness and face match — a selfie or short video proves a real person is present and matches the document.
- Screening — the verified name runs against sanctions, PEP and adverse-media lists.
- Risk scoring and tiering — low-risk users get standard limits; higher-risk profiles get enhanced due diligence or a rejection.
Most platforms tier limits by verification level: browsing may need nothing, small trades need basic KYC, large withdrawals need full verification. Getting the tiers right is a conversion problem as much as a compliance one — every extra step loses real users along with the bad actors.
Why it matters for exchange operators
An operator’s licence, banking relationships and payment providers all depend on demonstrable KYC/AML controls. Regulators and banks don’t just ask whether checks run — they ask for the records: who was verified, when, against what document, with what result. That means the KYC flow must be built into the platform’s admin and audit tooling, not bolted on.
KYC at Monbits
Monbits Exchange ships with KYC/AML tooling built in: configurable verification tiers, provider integrations and an admin view of every user’s verification state — so operators meet their obligations without building compliance software themselves.