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Why do crypto companies need AML and KYC procedures?

One of the most important steps to open a crypto business is to obtain the corresponding licenses. To obtain these licenses it is necessary to prepare, at least, the AML and KYC documents. It is important that you know the information they should contain and how to prepare them.

The AML document

This is a document that helps prevent money laundering.

It includes the measures, protocols, mechanisms and procedures to prevent the use of your platform for money laundering and terrorism activities.

This includes the correct identification of users and the requested documents, the mechanisms to ensure their identity (videoconferences, face-to-face meetings, collection of documents, photographs...) and how you track user data (audits, automated analysis, detection of suspicious activities…).

KYC Document (Know Your Customer)

This document is a guide of the information that you request from the users or clients of your platform (such as name, surname, age, passport or ID, education, work, bank details...).

There is a lot of information that can be requested, and each platform and system is different, therefore, the data required is different in each case. Some will make sense for some platforms and some won't.

The KYC document must include at least the information form that will be presented to the user or client when registering, as well as an explanation of any other document or data requested (passport, etc).

It is convenient for any crypto company, exchange or startup to prepare these documents, not only to obtain licenses but because they are essential for the company's activity. Investors will be asked by the financial authorities in the future.

To obtain these documents you have to contact an Estonian law firm to help you in the process of obtaining the license.

Updated on: 01/08/2022

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