KYC and KYB: Why Crypto Payment Services Need Your Data

If you accept cryptocurrency as a freelancer or a company, or simply pay for services through such platforms, you've almost certainly encountered requests to upload your passport, take a selfie, or submit business registration documents. This is part of the processes known as KYC (Know Your Customer) and KYB (Know Your Business).

For many users, these steps still raise questions: Why does a crypto service need my personal information if the whole point of crypto is decentralization and anonymity? The reality is a bit more complex.

What Is KYC and Why Do Crypto Platforms Require Identity Verification?

KYC is a standard identity verification process that is now common everywhere—from traditional banks to modern, established crypto platforms. Typically, you're asked to provide an identity document (passport or ID card), take a photo, or go through video verification. Sometimes, your address may also be required.

Even though this might seem unnecessary for financial operations, the purpose is to ensure that you are a real person. Moreover, banks and crypto platforms must confirm that you’re not on a wanted list, involved in criminal activities, or using the platform for money laundering. This verification not only protects the platform itself but also safeguards you as a user—if someone tries to hack your account or withdraw your funds, the service can compare the activity to previous records.

Beyond the ethical aspect, every financial institution is simply required to follow these rules. Almost every country enforces international Anti-Money Laundering (AML) regulations. If a company wants to operate legally, it must comply—otherwise, it risks losing its license. And really, why would you trust a company with a questionable reputation?

If You’re a Business, Get Ready for KYB Too

If you’re an entrepreneur, a company, or even a sole proprietor accepting crypto, the payment gateway will ask you to undergo KYB—a legal entity verification process. This is a more thorough check that includes verifying your company, its beneficiaries, incorporation documents, and sometimes your sources of income.

Many also see this as bureaucracy, but just like KYC, it's a form of insurance. Platforms want to ensure you’re not a shell company or an offshore front for laundering money. For you as a client, this means stable service, minimal risk of account blocks, and access to a broader range of financial tools. If you're honest with the platform, it will support you honestly in return when you face issues.

Why KYC and KYB Are Actually in Your Best Interest

KYC and KYB may seem inconvenient at first glance. But as mentioned, they help protect your funds by preventing hacks. In many cases, the entire process takes just a few minutes—especially when the platform uses automated verification solutions. Your data is stored in a secure environment and is not used for any third-party purposes. So, both sides can trust each other and rest easy. These verifications are now an industry standard, and the sooner this becomes the norm, the healthier and more trustworthy the entire crypto ecosystem will be.

What Happens If You Refuse KYC or KYB

If you choose to bypass these processes, be prepared for the consequences. First, without identity verification, you will almost always face limits on deposits or withdrawals. Second, even if a service doesn’t require KYC upfront, it may request it at any time—especially when you try to withdraw a large amount or show unusual activity. If you refuse, your account may be frozen. Moreover, platforms that don’t use KYC/KYB are likely unlicensed and can disappear at any moment—along with your funds. So it's better to go through verification once and fully enjoy the platform's benefits.

How to Complete It With Minimal Headache

First and foremost, choose a reliable crypto payment system. Most likely, it will offer a user-friendly verification process with minimal hassle.

For example, PassimPay provides a convenient and fast KYC check: just upload a photo or scan of your passport and take a selfie. Everything happens automatically—an external verification provider checks the documents, compares them to sanction and politically exposed persons (PEP) lists, and flags suspicious cases.

For KYB, PassimPay allows you to upload the necessary documents via a simple interface. The automated system then checks compliance with requirements and cross-checks against sanction and PEP databases, minimizing your effort and speeding up the process. If any questions arise, an experienced AML officer will reach out and quickly clarify the situation. At every stage, your data is securely protected, so you can safely trust the platform.

Still Have Questions About KYC or KYB?

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