Smartlands’ KYC Module Plan
August 20, 2018
Smartlands is going to implement a KYC Module to finalize creation of the Platform for issuing ABTs, in full compliance with legislation. Know Your Customer (or KYC) is a procedure for checking the identity of customers, which is a must for businesses that deal with financial services. Implementing KYC is required by regulators to prevent participants from being involved in illegal activities. KYC helps block money laundering and terrorist financing activities, as well as to better handle financial and legal risks. Specifically, KYC will allow Smartlands to prevent fraud and manipulations on the platform. All users who have intention to invest in ABTs released on the Smartlands platform, will be obliged to pass KYC.
Why is it Important to Implement KYC?
The main idea of blockchain technology is to establish transaction transparency and immutability, to establish a “trustless” environment (no need to trust counterparties and no intermediaries involved). For one, it looks like there is no need for verifying the customers’ identities. On the other hand, KYC procedure is absolutely essential in industries such as blockchain and fintech from a legal aspect. One of Smartlands’ key goals is to guarantee the security and legitimacy of the contributions made by our community. Therefore, Smartlands needs KYC to prevent and disclose money laundering attempts (AML procedures), or combat the financing of terrorism (CFT) pursuits at an early stage.
How KYC Will Help with Risk Prevention
Entities that provide investment opportunities to investors (e.g. crowdfunding platforms) may become unintentionally involved in money laundering activities, if their services are abused by some users. If used for illegal activities, such business faces a high potential for unfavorable publicity, which can make clients and partners stop trusting the company. Moreover, there is a high risk connected to violating legal obligations. The company may be obliged to pay fines or shut down its business by not delivering the crucial procedures in compliance with the applicable legal requirements. So KYC will ensure that Smartlands selects only eligible contributors for the ABT acquisition, without putting the business at risk.
Three Steps for Smartlands KYC Module Implementation
Our KYC module will be realized in three simple steps:
- Selection of a reliable provider that can implement the KYC module in compliance with the legislation in accordance with the relevant jurisdictions (UK and Lithuanian).
- Integration with an API KYC procedure provider.
- Development of our KYC module that stores relevant data and manages ABT trustline authorisations.