Blokchain Basics

•

min read

5 Steps to Complete Crypto Identity Verification

Straightforward 5-step KYC process for crypto: prepare ID and proof of address, complete biometric checks, pass sanctions screening, and submit extra documents if needed.

If you're diving into cryptocurrency, identity verification (commonly known as KYC) is a must. It ensures safety, regulatory compliance, and access to better platform features like higher withdrawal limits and fiat deposits. Here’s how you can complete the process quickly:

Prepare Your Government-Issued ID: Use a valid ID, such as a passport or driver’s license, ensuring it’s clear, unexpired, and meets platform requirements.
Gather Proof of Address: Provide recent documents like utility bills or bank statements (issued within the last 90 days) that match your account details.
Upload Documents and Complete Biometric Checks: Use high-quality images and follow instructions for facial recognition or liveness checks.
Pass Sanctions and Background Checks: Platforms screen against global watchlists to ensure compliance with laws and prevent misuse.
Complete Enhanced Due Diligence (if needed): For high-risk cases or larger transactions, additional documentation like bank statements or proof of funds may be required.

Once verified, you’ll gain access to trading and advanced features, with ongoing monitoring ensuring compliance and security. Follow these steps to get started safely and efficiently.

5 Steps to Complete Crypto KYC Identity Verification Process

Step 1: Prepare Your Government-Issued ID

The first step is submitting a valid government-issued photo ID. If you follow the guidelines, processing usually takes only a few hours. In fact, in 2024, there were over 70 billion digital identity verification checks completed globally, showcasing how efficient and reliable the process has become. Before you proceed, make sure to review the list of acceptable IDs and the specific document requirements.

Accepted Forms of ID

You can use several types of IDs for verification, including:

Passports
U.S. state-issued driver's licenses or ID cards
EU national identity cards (ensure you include both the front and back images)
Non-citizen resident or alien cards, such as a U.S. Green Card

However, certain documents are not accepted. Avoid submitting expired, temporary, or altered IDs. Similarly, student IDs, library cards, firearm licenses, and medical marijuana cards won't work for this process.

Document Quality Requirements

The quality of your ID image matters just as much as the type of document you submit. Always provide a full-color image, as black and white scans are often rejected. Make sure all corners of the document are visible and free from obstructions.

For the best results:

Use natural, indirect light to avoid glare, and skip the flash.
Place your ID on a dark, flat surface to create better contrast.
Hold your camera directly above the document to reduce distortion.
If your webcam produces unclear images, switch to your smartphone's camera for higher resolution.

These simple steps will help ensure your ID is accepted without delays.

Step 2: Gather Proof of Address

To comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations, platforms require you to verify your address. This process not only helps confirm your identity but also ensures compliance with jurisdictional rules and reduces fraud risks by verifying that you reside at a legitimate location.

"Identity verification serves two crucial purposes: it enhances user and transaction security by preventing unauthorized account access, and it enables regulatory compliance for secure interactions with financial institutions." - CEX.IO

Accepted Proof of Address Documents

Here are the types of documents commonly accepted for address verification:

Utility Bills: These include water, electricity, gas, internet, or landline telephone bills and are among the most frequently accepted options.
Financial Statements: Documents from banks, credit card companies, mortgage providers, or brokerage firms are widely recognized.
Government Correspondence: Examples include tax bills, voter registration cards, certificates of residence, and official letters from agencies like social security or benefits offices.
Property Documents: Signed lease agreements, property deeds, or home insurance policies may also be valid.
Employment-Related Documents: Payroll statements or official employment letters confirming your residential address might qualify.

However, certain documents are not accepted, such as mobile phone bills, medical bills, retail receipts, insurance policies without detailed statements, screenshots, and P.O. Box addresses.

Document Date and Accuracy Requirements

When submitting your proof of address, ensure it meets these conditions:

Date of Issue: Most platforms, including Binance.US, Kraken, and Coinbase, require documents issued within the last 90 days (3 months). Some, like Crypto.com and Wirex, may accept documents up to 6 months old, though the 90-day rule applies in many regions.
Name and Address Match: The name and address on the document must match the information on your account exactly. If your utility bill shows both a service address and a mailing address, ensure the service address aligns with your profile.
File Quality: Upload the original PDF file directly from your service provider for the best clarity. Avoid using photos of printed documents, as these often lead to rejections. Ensure all four corners of the document are visible in your scan, and do not upload password-protected files.

Once you’ve prepared your proof of address, you’ll be ready to move on to the next step: completing identity verification.

Step 3: Complete Identity Verification Methods

After gathering your government-issued ID and proof of address, you're ready to move forward with the verification process. Most crypto platforms rely on a mix of document scanning, biometric checks, and third-party services to confirm your identity and validate your documents.

Document Scanning and Upload

The clarity of your document photos is critical for a smooth verification process. Use natural, indirect light and place your ID on a dark, flat surface where all four corners are visible.

"If you must use a webcam, try setting the ID down flat and move the webcam instead of moving the ID." – Coinbase

Avoid holding the ID in your hand, as this can lead to blurred or obscured details. For the best results, use the latest version of Google Chrome or the platform's official mobile app, which often provide sharper image quality. Make sure the text on your ID is clear and readable, as blurry or damaged documents will likely be rejected. After uploading, double-check the auto-filled details to ensure they match your document exactly. Once this step is complete, you’ll move on to biometric verification.

Biometric Verification

With your documents uploaded, the next step is biometric verification. This involves using facial recognition technology to compare a real-time selfie or video with the photo on your government-issued ID. To prevent fraud, platforms also perform liveness checks, ensuring you're physically present and not using static images or pre-recorded videos.

Position the camera at eye level, ensuring your shoulders are visible. Use a neutral, well-lit background with bright, even lighting - avoid backlighting or shadows. If your ID photo includes glasses, wear them for the selfie; otherwise, remove them. Hats and sunglasses should also be removed. Whenever possible, use a high-resolution mobile camera for the clearest results.

Third-Party Verification Services

After completing the document and biometric checks, third-party services step in to finalize the process. Many crypto platforms partner with companies like Onfido, Jumio, or Trulioo to validate your documents, verify biometric data, detect potential fraud, and ensure compliance with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations.

In April 2023, Coinbase shared that its Identity Verification platform works with trusted partners to perform over 200 checks on every submitted ID, rejecting fraudulent documents with precision.

"Coinbase's IDV platform is designed to reject fraudulent documents and only pass IDs that have been rigorously reviewed with over 200 checks between us and our trusted partners".

The automated verification process can be completed in as little as 10 minutes. However, if manual review is required or there’s a high volume of submissions, it may take up to 24 hours.

When submitting your documents, ensure they include Latin characters or transliterations, as many automated systems cannot process other scripts. Also, avoid using third-party camera apps that add logos or watermarks, as these could lead to rejection.

Step 4: Pass Sanctions and Background Checks

Once your documents and biometrics are verified, platforms conduct automated checks against global sanctions lists and watchlists. This step, required by law, helps prevent money laundering and terrorism financing. It’s a behind-the-scenes process that also ties into ongoing compliance measures.

Sanctions List Screening

To ensure compliance with regulations, platforms cross-check your information against global sanctions databases. These include lists maintained by organizations like OFAC, the European Union, and the United Nations. These databases identify individuals, entities, and jurisdictions that businesses are legally barred from interacting with.

"Sanctions screening ensures that businesses do not engage with sanctioned entities, individuals, or jurisdictions." – Merkle Science

For instance, in November 2023, a major cryptocurrency platform faced a $968.6 million fine for facilitating 1.6 million transactions involving users in sanctioned jurisdictions, including areas under international sanctions. As part of the settlement, the platform agreed to a five-year compliance monitoring program to ensure future adherence to sanctions regulations. This case highlights the importance of rigorous sanctions screening - noncompliance can result in hefty fines and potential criminal charges.

Platforms also screen for Politically Exposed Persons (PEPs). These are individuals in high-profile public roles who may carry a greater risk of involvement in corruption. Automated tools analyze factors such as geographic location, occupation, and transaction patterns to assess risk. Keeping your government-issued ID up to date is crucial for accurate verification against these global databases.

Ongoing Compliance Monitoring

Sanctions checks don’t stop after the initial screening. Platforms maintain continuous oversight by monitoring accounts for changes in risk profiles. For example, a user might later appear on a sanctions list or gain PEP status. To ensure accurate risk assessments, platforms may periodically request updated information through "KYC Refresh" notifications.

It’s also important to avoid using VPNs to bypass jurisdictional restrictions. Platforms have faced penalties for allowing such circumventions. If your account is flagged during monitoring, your activities could be temporarily restricted while an investigation is conducted. You might also be required to provide additional documentation to resolve the issue.

Step 5: Enhanced Due Diligence (If Required)

Enhanced Due Diligence (EDD) is only necessary in specific cases and serves as a deeper level of verification compared to standard checks. While standard verification typically takes 24–48 hours, EDD can extend the process to 7–9 business days.

Reasons for Enhanced Verification

Certain circumstances trigger the need for additional scrutiny. One common reason is high transaction volumes - if you want to increase your deposit, withdrawal, or trading limits, enhanced verification is often required [38,39]. Similarly, users in countries classified as high-risk by organizations like the Financial Action Task Force (FATF) or the European Union may need to submit a Source of Wealth (SOW) declaration before using fiat services.

Other scenarios include accessing specialized features, such as Over-the-Counter (OTC) trading desks or institutional-grade services [5,39,40]. Account recovery after losing access may also demand additional steps, like providing a verification video or screenshots of previously linked devices. Additionally, platforms periodically review accounts to comply with changing regulations, which may result in requests for updated documentation.

"To comply with Anti-Money Laundering (AML) regulations, Binance is required to conduct source of wealth and source of funds reviews on certain accounts. It is a standard and common compliance practice." – Binance

Additional Documentation Requirements

Enhanced verification primarily focuses on verifying the origins of your funds. This involves distinguishing between Source of Funds (SOF) - the specific money used for a transaction - and Source of Wealth (SOW) - the activities that contributed to your overall net worth. Commonly requested documents include recent payslips, tax returns, and bank statements [38,40].

Category	Acceptable Documentation
Salary	Recent payslips, bank statements showing salary deposits, or prior year tax statements
Self-Employment	Latest invoices, service contracts, profit/loss statements, or tax returns [38,40]
Investment/Profits	Dividend statements, audited company accounts, or investment provider statements
Crypto Wealth	Exchange statements, cold wallet screenshots, or fiat-to-crypto purchase receipts [38,40]
Inheritance/Gifts	Wills, letters from executors/lawyers, or signed gift/donation agreements

You may also need to provide a second government-issued ID, different from the one used for basic verification. Some platforms might request a "selfie with ID", where you hold your ID next to a handwritten note containing the platform name, the current date, and your signature. To ensure approval, use a dark background, make sure all corners of the document are visible, and submit images with at least 300 dpi resolution [21,40]. If your documents aren't in Latin characters, include a notarized translation [22,10].

Next, find out what happens after verification and how you can start using your account for transactions.

What Happens After Verification

Once your account is verified, the process doesn’t stop there. Continuous monitoring plays a key role in keeping your account secure. After verification, access to account features is provided in stages. Basic verification allows you to perform standard actions like buying, selling, and converting cryptocurrency. On the other hand, enhanced verification unlocks higher limits and advanced tools, though it may take extra time to process. Basic checks are typically completed in real time, while enhanced checks may require additional steps, potentially delaying access to advanced features.

As Isha Bhatnagar from Coinbase puts it:

"While many believe KYC is simply a one-time event enabling a user to onboard onto our ecosystem, it is actually a lifecycle." – Isha Bhatnagar, Coinbase.

This means that verification is just the beginning. Ongoing monitoring ensures your account activity remains secure and compliant.

Account Access and Transaction Monitoring

Once your account is active, platforms continuously monitor your activity to ensure transactions are safe and legitimate. While you can start trading after verification, these transactions undergo regular scrutiny. Monitoring techniques include velocity checks, IP and device fingerprinting, and clustering analysis to detect patterns like the reuse of stolen identities. Platforms also conduct periodic risk-based reviews to confirm that your activity matches the profile created during onboarding.

To combat fraud and illicit activity, blockchain analytics tools track cryptocurrency flows. These tools are critical, especially considering that in 2023 alone, crypto users lost over $2 billion to hacks, scams, and rug-pulls. The stakes are high - not just for users but also for platforms. Between 2008 and 2018, global authorities levied $26 billion in fines for violations of AML, KYC, and sanctions regulations.

If your transaction volume rises or your risk profile changes, platforms may request updated documents, such as proof of address or explanations about the source of your funds. Keeping your account's "intended use" accurate can help you avoid unnecessary investigations.

Know Your Transaction (KYT) Practices

KYT, or Know Your Transaction, is a system that continuously monitors transactions for risks like money laundering or sanctions violations. It even revisits past transactions if new risks are identified.

"Continuous cryptocurrency transaction monitoring: it's the best way for compliance teams to identify and respond to historical transactions that are later reclassified as high-risk." – Chainalysis Team.

KYT works in the background, requiring no effort from users. Since 2018, the U.S. Treasury's OFAC has listed specific cryptocurrency addresses on its Specially Designated Nationals (SDN) list to tackle ransomware and cybercrime. If a transaction is flagged as high-risk, you may need to provide further information about the source of funds or the purpose of your transfer.

Additionally, platforms follow the FATF Travel Rule, which mandates collecting and sharing identifying information for transfers over $1,000. Automated alerts and risk thresholds ensure compliance teams only step in when necessary. While KYT makes transactions traceable for exchanges and law enforcement, reputable platforms prioritize user privacy by using advanced encryption and adhering to data protection laws like GDPR.

Key Takeaways

Here's a quick rundown of the crypto identity verification process: it involves five key steps - verifying a government-issued ID, confirming your address, submitting biometric and document scans, passing sanctions checks, and, if required, completing additional due diligence.

Kryptonim makes this process easier by skipping traditional account registration. To get started, you only need an email address. For users in the U.S., UK, and Canada, providing a billing address is also required. The platform accepts standard documents that meet validity criteria.

For payments, you can choose between card payments or e-wallets like Apple Pay and Google Pay for quicker processing - these are typically completed within minutes. Bank transfers, on the other hand, may take up to 3 business days. Make sure to keep the verification page open and confirm your camera is functioning properly to ensure smooth facial recognition.

As an EU-regulated platform, Kryptonim combines strict security measures with fast processing. Your data is safeguarded with industry-standard encryption, allowing you to start crypto trading quickly without sacrificing compliance or security.

FAQs

What documents do I need to verify my identity for crypto transactions?

To verify your identity for crypto transactions, you'll usually need to provide two types of documents:

A government-issued photo ID: This could be your passport, driver’s license, or national ID card.
Proof of address: Examples include a recent utility bill, bank statement, or an official document from a government agency. These need to show your name and address and are typically required to be dated within the past 90 days.

Ensure your documents are clear, easy to read, and current to help avoid any delays in the verification process.

How long does it usually take to verify your identity on a crypto platform?

The process of verifying your identity on cryptocurrency platforms is usually both quick and simple. Generally, it takes around 5 to 10 minutes to complete after you’ve uploaded the necessary documents. Platforms such as Kryptonim aim to make this process as seamless as possible, often approving submissions shortly after they’re received. However, the time required can vary depending on the platform and how accurate or complete your information is.

What should I do if my crypto identity verification is not approved?

If your identity verification doesn’t go through, you might find yourself with limited access to some platform features - like trading or depositing funds. Often, your account will be restricted to withdrawals only until the verification process is successfully completed.

To fix this, carefully review the details and documents you submitted. Make sure everything is accurate, and your photos or scans are clear. Follow the platform’s guidelines closely, such as providing a valid government-issued ID. If the problem continues, reach out to the platform’s support team for further help.