What is KYC light?
KYC light, also known as Soft-KYC, refers to a simplified version of the Know Your Customer (KYC) process. The KYC process is a procedure that financial institutions and other businesses use to verify the identity of their customers and ensure that they are not involved in illegal activities.
The KYC process usually involves collecting and verifying information about the customer, such as name, address and identification documents.
Meanwhile, more and more bitcoin exchanges are required to offer KYC in the sign-up process for regulatory reasons. In a sign-up process, you have to prove your identity beforehand via ID documents before you are allowed to invest in bitcoin.
Most people have no problem registering through a KYC process. However, you should not entrust your data to just anyone. If you look at the past, the sensitive data of customers was increasingly handled improperly. For example, various cyberattacks led to the theft and publication of ID or passport data at several exchanges.
KYC light process
KYC light is a simplified version of the KYC process in which less information about the clientele is collected and verified. The goal of KYC light is to balance customer convenience with regulatory compliance.
Buy bitcoin without registration
Pocket makes it possible to buy bitcoin without registration. In doing so, the Bitcoin wallet is linked to an IBAN address. As soon as a transfer with a specific purpose is made, bitcoin are automatically sent to your bitcoin wallet at the current price. This is called KYC light and thus allows you an easier onboarding to invest in bitcoin.
KYC light process
With Pocket, you don't have to go through the whole KYC procedure when you sign up if you invest under CHF 1,000 (1,000 euros) in bitcoin daily or CHF 100,000 (100,000 euros) annually. With Pocket, you verify yourself once with a bank transaction (IBAN) and can even set up recurring bitcoin purchases automatically with a standing order afterwards.
Through the bank transaction, Pocket knows your full name and the bank. Depending on the bank, the home address is also sent to us. Nevertheless, Pocket gets to see less sensitive data, such as no date of birth, nationality or passport photo, proof of address (electricity bill, etc.).
Many customers appreciate this method, as you provide less personal data, and at the same time it makes buying bitcoin easier and faster.
Why is Pocket able to offer KYC light?
Pocket is based in Switzerland and is regulated by the Swiss Financial Market Supervisory Authority FINMA. In Switzerland, there is a threshold as to which customers and clients of exchanges or brokers can make use of it and do not have to fully identify themselves.
The threshold, as mentioned above, is CHF 1,000 per day or 100,000 per year. In the case of full identification (KYC procedure) at Pocket, this limit does not apply.
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