68% of the cryptocurrency exchanges and wallets in EU and US do not conduct the verification procedure properly

68% of the cryptocurrency exchanges and wallets in EU and US do not conduct the verification procedure properly

Analytical center PAID Strategies announced the results of the research of cryptocurrency wallets and exchangers. The study, commissioned by Mitek, the world leader in solutions for the verification of the digital identity, found out how popular the exchangers, digital currencies and wallets in Europe and the US use the rule of “Know your customer” (KYC), when registering new users.

The study, entitled “the Crisis of the crypto identification” proved that 68% of the popular wallets and exchanges allow users to trade crypto-currencies without a formal identification and verification of “Know your customer” (KYC). The fifth EU Directive on combating money laundering, AMLD5, applies to these platforms, the same regulatory requirements as other financial products, such as Bank accounts, requiring verification of the identity of the new client.

The recent surge ICO and the unstable price of Bitcoin cryptocurrency has transformed the markets into an attractive place both for legal and for illegal trading activities.

The study evaluates how the registration process meets the requirements AMLD5, which should come into force next year, as well as the speed and ease with which the customer can register and start working. The following table evaluates the exchange and wallets in accordance with the above identity verification process.

“Wallets and cryptocurrency exchanges want to enjoy the same trust as traditional financial services, but they need to rise above the sometimes dubious reputation of crypto-currencies of the past and position yourself as the” model of the economic system,” says John Devlin, principal analyst at PAID Strategies.

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