What Is "Know Your Customer (KYC)"?

If you have just signed up for a Cake DeFi account, you’re sure to have been asked to “complete your KYC” as part of the identity verification process. What is it? And what’s the real importance of successfully completing this process?

Read this article and find out!

KEY TAKEAWAYS

• General Purpose of KYC
• KYC in the Crypto Space
• Completing Your KYC with Cake DeFi

GENERAL PURPOSE OF KYC

Completing your KYC is a standard process that is widely implemented in traditional banking and finance for the purpose of providing protection and transparency to both financial service providers and their clients.

How exactly does KYC help achieve this?

KYC, typically, involves requirements or policies such as risk management, customer acceptance policies, and transaction monitoring. As such, KYC allows service providers to obtain detailed information on clients' risk tolerance, investment knowledge and / or financial position. With such information, service providers are able to provide the most suitable investment advice or options to clients - thus, protecting them from risks and pitfalls involved.

All in all, KYC is essential to the financial service provider-client relationship as it first establishes facts before transactions or recommendations are made.

KYC IN THE CRYPTO SPACE

Since KYC, as a whole, helps verify the identity of those interested in using services or products offered by financial institutions, it has become a significant tool in fighting against criminal activities such as fraud, money laundering, identify theft and terrorist funding today.

As such, crypto companies - including crypto exchanges and Decentralized Finance (DeFi) platforms -  are mandated by law to carry out certain identity and background checks on their clients before allowing them to use their products and / or services.

Furthermore, a report published by Ransomware Task Force in 2021, not only highlighted that KYC helps tackle malicious activities such as ransomware but also suggested for existing KYC laws to be further enforced and that additional regulations may be necessary.

COMPLETING YOUR KYC WITH CAKE DEFI

Completing your KYC with Cake DeFi is very simple and straightforward. Once providing their preferred login details on the sign up page, new users will immediately be notified to complete the verification process to be able to use the products and services that we offer.

Once you click on the “VERIFY NOW” button and the verification process begins, you will then be asked to enter your mobile number. A verification code will then be sent to that same mobile number.

The next step consists of two parts: Proof-Of-Identity and Proof-Of-Address. To know the requirements for Proof-Of-Identity, you may click here. To know the requirements for Proof-Of-Address, you may click here.

Finally, to complete the KYC process, you will have to provide a selfie.

And that’s it! Upon completing the KYC process, users can start generating cash flow and passive income through our Lending, Staking and Liquidity Mining services, as well as our Borrow product. Also, users will not only be able to access our Learn page but also get the crypto rewards that they would earn from successfully completing the quizzes available on there.

For more useful information about Cake DeFi’s processes, you may visit our blog section or FAQ section.