Account verification on cryptocurrency exchanges and Forex brokers: the significance of the procedure, features, current recommendations

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The modern Internet allows any user not only to learn, have fun and communicate, but also provides an opportunity to earn money. The most profitable and relatively labor-intensive option is trading various assets in the financial markets. People have stable, solid incomes in Forex, cryptocurrency exchanges and other platforms that allow traders and investors to speculate in popular instruments.

Most beginners who show a desire to earn money by trading options, currencies, commodities or digital coins are often frightened by one significant procedure, which brokers practically compel to go through. This implies, of course, verification of the account and the trading account linked to it. This procedure is alarming for users, since the provision of personal information is determined by its terms.

Considering the abundance of various scammers and cybercriminals on the Internet, the fears are quite logical. However, one cannot overlook the fact of the real purpose of verification. Initially, it is designed to ensure the safety of the trader’s deposit.

For example, on the Exmo exchange, it is not necessary to verify an account – there are no restrictions on the amount of deposit or withdrawal. This procedure is needed if you deposit or withdraw an account with fiat currencies through some payment systems with increased security requirements for payments. These include: bank cards, transfers, payment systems Neteller, Skrill and some others. For verification, you need to provide information according to the online form and confirm your identity, address.

On another popular exchange, Binance, there is a limitation for unverified accounts. You can withdraw an amount per day, no more than 2 BTC. For most users, this is enough and few go through the confirmation procedure. On Bittrex – the withdrawal amount is higher – up to 3 BTC.

On the Localbitcoins exchange, only sellers need to be verified, as well as buyers, if the seller has set such a condition in the ad. There is no limit on the amount.

On the Bitfinex crypto exchange, identity verification is necessary to work with fiat and expand the functionality of the terminal. On Crex24, you only need to go through verification when replenishing your account through cards or payment systems Webmoney, Yandex.

As you can see, each trading platform sets its own conditions and restrictions. On most of them, when performing transactions with only cryptocurrency, verification is not required.

Let us examine in detail the paramount features of such a procedure, its importance, as well as the basic procedure required from users by option brokers, the Forex market or the administration of cryptocurrency exchanges.

Account verification and the need to disclose personal information

Dealing centers make users, when verifying their account, in addition to filling out an ordinary questionnaire, confirm the specified data with scanned documents. Many are reasonably afraid to send, for example, a scan of a passport, a photo of a plastic card and pictures of various receipts at the request of people who are virtually unknown to anyone. These concerns are due to the likelihood of some scammers taking possession of the most important personal information.

This view is formed due to the popular myth about the allegedly urgent danger of obtaining a loan by “unclean” employees of trading platforms or Internet thieves. This hypothetical conclusion is completely groundless and illiterate. In reality, a credit institution, when processing any loan, certainly requires originals of documents from a client who must be present.

Nuance! If a scanned copy of the document was accepted for the legitimate registration of a loan agreement, then cyber thieves and fraudsters would not bother creating crypto-exchanges, undertaking complex customer identifications and other troubles. Now the Internet is flooded with all sorts of copies of absolutely any documents. You can find any data without undue effort!

Reliable brokers, stock exchanges and dealing centers will not provide copies of passports or scans of other documents to third parties. They earn consistently on commissions, any paid services and advertising. There is no reason to ruin such an established, profitable business because of 1, 2, 3 small loans. In addition, acts of this type are criminally punishable.

Experts or experienced traders who have been verified recommend that especially restless, impressionable users implement a reliable but easy method of protection. Before sending electronic copies of documents, make special watermarks on them in a photo editor, for example, “To confirm identity”, “Copy for Bitmex exchange”, etc. Documents carefully corrected in this way will fit only for a specific broker or cryptocurrency exchange.

Example. Verification page on Bitfinex:

Why account verification is needed

The process, called “account verification”, implies a sequential set of measures that are needed by dealing centers, brokers or trading crypto platforms directly to certify the actual age of majority of the client. In other words, confirmation of performance is required at the time of registration (for Russia) for the full 18 years.

In addition to this aspect, the importance of the verification procedure is determined by the need to accurately establish the owner of the trade deposit and the electronic wallet (plastic card) where the money transaction is ordered. It turns out that even hacking of an account by fraudsters will not give an opportunity to withdraw funds. Their card number, cryptocurrency wallet or fiat money storage account will not be pre-recorded in the system.

Now passing verification is an absolute condition when opening an account to work in the financial markets. All legal, large, reputable brokers, dealing centers or cryptocurrency exchanges certainly require proof of identity with copies of a certain set of documents. There is an organization called FATF, which is involved in the prevention of money laundering. It obliges major remote investment service providers to compel traders and investors to provide and verify personal information. Such harsh conditions have arisen due to the actualization of the financing of terrorist groups and incessant attempts to legalize the proceeds of crime.

Note! Mandatory verification serves as a clear indicator of the legality and authority of a particular Forex broker or cryptocurrency exchange. The fact that there is no requirement to verify identity on the financial platform demonstrates a high possibility of fraud. You can reliably protect your cryptocoins or electronic currency on your balance sheet with a serious broker and a reputable dealing center that requires verification!

Account verification sequence

The procedure for confirming profile data in an account on various services is characterized by an individual policy and special conditions. Also, almost all dealing centers, trading platforms, brokers spend unequal time on this check.

The client is often required to copy:

✅  The main pages of the passport are the main spread (photo, where and by whom the document was issued, name, number, series), as well as registration data (current registration).

✅  Utility receipt – this will confirm the validity of the specified residential address.

✅  Driver’s license, military ID or university diploma – such scanned copies serve as an addition to confirm the identity.

✅  A selfie or a photo with a bank card in hand is often requested to verify the authenticity of the details used when withdrawing / depositing funds.

✅  Screens of the e-wallet account – you need a main page and a place where the last transfer to a specific dealing center, cryptocurrency exchange or forex broker is marked.

Important! Brokers and marketplaces can reject a verification request for various reasons. The most common reasons for refusal are the unsatisfactory quality of the provided copies of the required documents and the presence of signs of corrections in the photo editor. There is no extraordinary disaster here. The application should be repeated with new copies and photographs!

Usually, the financial security department of the trading platform or a certain employee at the broker is involved in the control of passport data and verification of scanned copies. The final stage of the account verification procedure does not last long. There are cryptocurrency exchanges and Forex brokers where traders have to wait months for a result, however, such cases are rare. After complete verification, restrictive limits are removed from the investor or speculator and extended opportunities for activities are provided.

Conclusion

Despite the seeming formality of the identity verification process, clients of financial exchanges need to be verified. It is necessary to realize its importance precisely for the effective protection of the funds of people who trade cryptocurrency, stocks, currencies and other financial assets.

Professionals advise to verify the account immediately upon completion of opening a trading account. This is due to several factors:

✅  Getting additional features. Brokers often expand their working functionality for traders who have verified their identity.

✅  Minimizing potential difficulties. Sometimes the option of withdrawing earned coins or fiat money is blocked if there are problems with the procedure. Resubmission of copies of documents and a new check will take some time.

✅  Improving working conditions and optimizing commission fees. Often, dealing centers reduce commissions and reduce the size of the threshold amount for withdrawal.

There is no need to be afraid of verification procedures. Reputable cryptocurrency exchanges and reliable Forex brokers protect the personal information of clients with high quality, so the risk of fraud is very small here.

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