How are cryptocurrency exchanges in India vetting customers? | Explained

Key Highlights

• In addition to this, exchanges will have to collect their customers’ occupation and income range, a selfie with “liveness detection,” and latitude and longitude coordinates of the onboarding location with the date, timestamp, and IP address.
• What’s more, the customer’s bank account will have to be verified through the penny drop method, in which a small sum is transacted to make sure that the account belongs to the stated person and is in working order.
• Exchanges will also have to identify high-risk transactions and clients in order to apply enhanced measures to them.
• Under this framework, high-risk clients will need to undergo KYC updates at least once every six months while others will have to undergo this update at least once every year.
• The guidelines also “strongly discouraged” Initial Coin Offering (ICO) and Initial Token Offering (ITO)-related activities, apart from urging other service providers dealing with virtual digital assets to register with the FIU-IND as reporting entities.