Expanding Cryptocurrency Operations with KYC Service Providers

Expanding Cryptocurrency Operations with KYC Service Providers

In the rapidly evolving world of cryptocurrencies, compliance has become a critical concern for businesses operating in this space. Sumsub, a leading KYC (Know Your Customer) provider, is helping crypto businesses navigate the complex regulatory landscape with its customisable and jurisdiction-aware solutions.

Sumsub's in-house compliance specialists work closely with clients to ensure they remain compliant with all things compliance, while their automated solution is constantly being improved to suit particular use cases. This approach enables crypto businesses to comply with local regulations, adapt to different types of required documents, and maintain high pass rates.

Tailored KYC Solutions for Diverse Markets

KYC providers, such as Sumsub, deliver customisable, jurisdiction-aware verification and risk assessment tools. These solutions are grounded in both local document recognition and global regulatory mandates, employing agile processes to remain compliant across different markets and evolving regulations.

Key features of these solutions include:

1. Local regulatory compliance: Providers incorporate country-specific mandates such as document types, data collection requirements, and periodic data updates. For example, UK crypto service providers must collect detailed personal data including National Insurance number to meet HMRC’s enhanced KYC regime for tax compliance.
2. Risk-based customer due diligence: KYC solutions assess customer risk profiles based on transaction types, source of funds, and geographic or regulatory considerations. Jurisdictions like the UK, Singapore, and Hong Kong apply differing levels of due diligence depending on customer sophistication and risk, with increased safeguards for retail investors.
3. Verification of local documents: Systems recognise and validate various national identity documents and local data formats, ensuring authenticity through document checks and database verification. This supports compliance with AML regulations and avoids fraudulent onboarding.
4. Integration with regulatory frameworks: Providers align their KYC processes with international standards such as FATF recommendations (including the Travel Rule), AML/CFT mandates, and specific local financial laws (e.g., South Africa’s Financial Advisory and Intermediary Services Act).
5. Agile and modular architecture: To accommodate rapid regulatory changes and differences, KYC technology employs an agile design, allowing rapid updates and customisation per jurisdiction. This includes modular workflows that can be adjusted for new requirements or enhanced investor protections like virtual-asset knowledge assessments.
6. Ongoing monitoring and updates: KYC providers implement periodic customer information reviews and suspicious activity monitoring to maintain compliance over time and quickly respond to new regulatory demands or emerging risks.
7. Collaboration and regulatory sandboxing: Some providers engage in regulatory sandboxes or work with multiple regulators to test and enhance compliance solutions in a multi-jurisdictional environment, which improves adaptability and aligns with principle-based regulation approaches.

Global Reach, Local Touch

Sumsub's KYC solution has helped its client Xena facilitate personal data protection covering all customers from Europe, the USA, Asia, and the Commonwealth of Independent States. The provider ensures its OCR (Optical Character Recognition) solution can recognise atypical documents and read non-Latin alphabets, converting them into a computer-readable format.

When launching in new countries, crypto businesses should learn about the crypto regulations relevant to the region. For example, the EU has strict rules in the 4th and 5th AMLDs, while Latin American countries have less strict rules as they are still developing their crypto regulations. KYC providers should ensure compatibility with regional documents, such as the ability to collect National Identity Numbers (NINs) in Nigeria to verify users by comparing obtained identity information with the country's NIN-linked database.

Sumsub's KYC solution aims to achieve up to 98% pass rate for crypto companies. Crypto companies should consider KYC providers that match expectations and create optimal verification flows to comply with regulations and simplify the onboarding process. The provider has created a special feature to adapt to the peculiarity of Turkish driver's licenses, preventing rejection due to repeated numbers.

In summary, Sumsub's KYC solutions provide crypto businesses with the tools they need to navigate the complex world of compliance, ensuring they remain compliant with local regulations while maintaining a smooth onboarding process for their customers.

1. Leveraging technology and finance expertise, Sumsub's KYC solution adapts to diverse markets by accommodating local regulatory compliance, risk-based customer due diligence, and verification of various national identity documents.
2. With a focus on global reach and local touch, Sumsub's KYC solution ensures compatibility with regional documents, such as the ability to collect National Identity Numbers in Nigeria, to maintain compliance in different jurisdictions.

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