Changing KYC

Unlike in traditional banking, where the recipients’ name must match the account number for a transaction to be valid, with cryptocurrency no data needs to be provided. Furthermore transactions are irreversible regardless of the recipient. To make the space comply with the regulatory standards required to issue legal security tokens, identification is necessary. This requires reliable Customer Due Diligence and Know Your Client (KYC) auditing procedures for investors and transactors.

According to Thomson Reuters “Know Your Client Survey,” the costs and complexity of KYC are rising and are having a negative impact on businesses. While financial firms’ average costs to meet their obligations are $60 million, some are spending up to $500 million on compliance with KYC and Customer Due Diligence.

Although a few solutions have emerged attempting to provide decentralized technologies for cheap blockchain identity management, none are ripe for enterprises in need of scalability, reliability, accountability, and compliance. This is where Trusti innovates by merging traditional and proved technologies for digital certificates with the emerging decentralized markets for security tokens.

The Israeli company developed a platform that does more than just providing the real identity of issuers and transactors. Trusti provides a venue for independent blockchain identity providers and established bureaus like the IRS or the DMV, to provide accreditation such as licenses and digital certificates to any entity. So, if you attempt to sell crypto-assets –namely security tokens– to someone, Trusti, with the permission of the second party, can provide the name of the entity and tell you if that entity is an accredited investor.

Zachary Swerdlow, CEO, explains what is the company’s bottom line: “We want to be the most trusted security partner of Blockchain accredited investors. We will provide them certifications that will allow them to do transactions in a secure and compliant position.”

These technological breakthroughs, such as the ability to have secure, accredited wallets, will lend the much-needed transparency the ecosystem needs, and pave the way for the coming wave of security tokens.