KYC is a common term in the blockchain industry and stands for Know Your Customer. It is a procedure used by businesses to verify the identity of their users to prevent money laundering and financial terrorism.
KYC, or "Know Your Customer," is a process used by businesses and organizations to verify the identity of their users or traders and assess their potential risks for money laundering or financing terrorism. One of the key functionalities of KYC in the blockchain space is to ensure compliance with regulatory requirements.
For example, many countries have laws requiring financial institutions and other businesses to perform KYC checks on their customers to prevent illicit activities such as money laundering and terrorist financing. By conducting KYC checks, companies can demonstrate that they are taking steps to avoid these activities and protect their customers and the broader financial system.
In addition to helping businesses comply with regulatory requirements, KYC can also help protect blockchain networks' security and integrity. By verifying the identity of users, companies can ensure that they are not dealing with fraudulent actors or individuals with malicious intentions. This can help to reduce the risk of scams, fraud, and other types of cybercrime on the blockchain.