How to Use Fiat Money to Access dApps — Is KYC Really Necessary?
Updated: 2 days ago
KYC is nobody's favorite bureaucratic procedure. Let's face it — it’s a poor start to become a customer. However, there are a few compelling reasons why these controls are necessary.
With e-commerce on the rise due to the conditions created by the pandemic and the increasingly common use of digital forms of money (whether fiat or crypto), the control of transactions to ensure non-fraudulent use of financial systems has become more peremptory.
It is expected that these controls will be key in ensuring the security of transfers with the introduction and popularization of digital fiat money (CBDC).
In any case, for Eidoo users to always have a simple way to switch between crypto and fiat, it is essential to comply with the rules that affect the latter.
What Is KYC Exactly?
The dominant frame of reference for the KYC procedure is defined in the anti-money-laundering regulations such as the EU directive 2015/849. It is mandatory to follow these guidelines for providers of exchange services between virtual currencies and fiat money.
In addition, the rules set out on the markets in financial instruments and amending Directive apply to the necessary measures to comply with the GDPR that guarantees the privacy and security of your personal data.
So, to answer the original question — yes, KYC is fair and necessary.
Mentioning all these types of control, strange wording like using the term “peremptory”, and legal doc linking, may look strange to you. It sort of gives the impression that we are doing something irreparable, right? In reality, they are all guaranteeing the safety of your person, your data, and your funds, both crypto, and fiat money.
Here is how:
KYC is a great help in proving your identity which is linked to the ownership of your funds when you want to interact with them.
MiFID II establishes a series of requirements on the information and understanding of the financial products that clients can contract. It demonstrates that the relationship between financial institutions and customers is fair and not intended to disguise misleading products with financial mumbo-jumbo and ever-smaller fonts.
Finally, the GDPR ensures that your data is treated with the care it deserves.
How Does Eidoo Do KYC?
Eidoo implements these requirements independently from the decentralized app through EidooID, an identification process that facilitates access to different levels of Eidoo services depending on the degree of identity verification the user provides.
These levels are as follows:
Unverified — Only crypto investments.
Tier 1 — Invest or retire up to 5K CHF annually.
Tier 2 — Invest or retire up to 500K CHF annually.
Tier 3 — Invest or retire more than 500K CHF annually.
Each tier requires the verification of the information that may be approved or rejected. This is why different details or documents are requested during the process depending on the amount of fiat money you expect to invest. Please note that you do not have to comply with all verification levels if you do not plan to use the investment limitations. It is a tailor-made process.
Eidoo KYC Tier 1
Tier 1 requires entering personal data, a mobile phone number (with SMS validation), an online photo of your passport or ID card, a personal photo, and a short video performing a simple task as proof that you are a real person. This process also links your EidooID with your Ethereum account.
Eidoo KYC Tier 2
To access tier 2, you must have the requirements of tier 1 fulfilled and provide proof of residency, such as a bank statement or utility bill in paper format, as well as providing information about the beneficial owner of the funds. This level is also necessary in order to apply for an eidooCARD connecting your crypto account to fiat money. The card also requires you to be an EU or UK resident.
You may want to have some ETH in the wallet for payment of fees and an amount of PNT that allows access to the plan chosen for the card — 20 for Basic, 25,000 for VIP, and 200,000 for Black.
Eidoo KYC Tier 3
Finally, tier 3 verification is required for those investors who want to trade more than 500K CHF. This tier will require a more personal assessment of the investor and the funds.
All in all, although the process can seem a bit tedious, it is necessary for the protection of users and their capital. That is why following these guidelines is important to have the safest and most legal experience when using your Eidoo wallet.
Give Eiddo ID a try and join the Eidoo decentralized platform now. In no time you can be up and running investing both your fiat and crypto with Eidoo.