Crypto Casino KYC Requirements: Everything You Should Know

Crypto casinos, unlike traditional online casinos, accept digital currencies like BTC, LTC, and USDT, which are well known for their decentralized structure and uncompromised anonymity of the players. Let us take a look at how the casinos look like when the KYC requirements are implemented.

Know Your Customer (KYC); A Process to Prevent Fraudulent and Terrorist Financing

KYC is a mandatory process implemented in financial institutions to verify and assess the identity and address of their customers to prevent all possible fraudulent and money laundering activities. The KYC process consists of verifying the identity of the customers, it verifies the identity through various documents like passports, driver’s licenses, utility bills, etc. The primary aim of implementing KYC in financial institutions is to comply with regulatory instructions by preventing fraudulent and illegal activities like money laundering and to ensure a secure environment. KYC practices are used in other industries like insurance, healthcare, telecommunications, and real estate. 

To complete the KYC verification process, individuals must present their government-authorized identity documents to prove they are who they claim to be. The key components of the KYC process are the Customer Identification Program (CIP), Customer Due Diligence (CDD), and Enhanced Due Diligence (EDD). Licensed crypto casinos are requested to implement KYC processes, the inclusion has become mandatory even though it defeats all the purposes of crypto casinos where anonymity and privacy are at the core.

KYC Requirements In Crypto Casinos

Introducing and implementing KYC protocol is becoming increasingly mandatory for crypto casinos, it is because many countries and jurisdictions are improving standards to prevent all kinds of malicious activities like money laundering and ensure robust security. Implementing KYC in crypto casinos would be contradictory since it is against the nature and values of crypto casinos. This is why most crypto casinos are reluctant to introduce KYC protocol in their services. 

The KYC protocols or requirements vary according to the licensing of the crypto casinos, and this article focuses on the regulations proposed for the Curacao-licensed casinos since most of the top-rated crypto casinos possess Curacao licenses. As per the latest regulatory compliances, every casino holding a Curacao license must meet the Regulations for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) proposed by the Gaming Control Board of Curacao. KYC requirements in crypto casinos include player verification, ongoing monitoring, data keeping, reporting suspicious activities, staff training, etc. Let us comprehensively analyze each of them. 

1. Player Identification

According to emerging regulatory compliances, crypto casinos are required to integrate or implement KYC protocols to verify the players’ identity. The procedures consist of collecting and verifying government-issued IDs, passports, driving licenses, financial statements, etc. These pieces of information are usually collected from the players at the time of registration on the platform. 

2. Ongoing Monitoring

Ongoing monitoring is one of the important activities of the KYC requirements, the platforms are recommended to actively monitor and try to detect any suspicious or shady activities to ensure a safe and secure environment. They need to look out for patterns indicating money laundering, large bets or deposits, abnormal changes in betting patterns, recurring withdrawals, etc.

3. Enhanced Due Diligence (EDD)

The gambling sites might need to conduct EDD for High-risk customers, and high-rollers like politically exposed persons. The procedures involve collecting additional data or information about the particular customer. The additional pieces of information consist of the source of the funds and the purpose of the transactions. 

4. Data/Record Keeping

The latest Know Your Customer (KYC) requirements suggest that casinos must keep complete records of player transactions for a specific time period. All the records kept in their database must be submitted to regulatory authorities if there is any request from them upon any investigations. 

5. Communicating Suspicious Activities

Crypto casinos must report and communicate every kind of suspicious activity or transaction to the concerned authorities. Casinos have the legal authority to block the players’ accounts and are legally protected to refuse the payout in these kinds of scenarios.

6. Staff Training

All the recognized casino staff must be well-trained in Anti-Money Laundering (AML) regulations and terrorist financing. These training courses and information equip the staff to successfully identify and report suspicious and malicious activities within the platform.

These are the general KYC requirements for crypto casinos, implementing these protocols would demolish the idea of decentralization and anonymity of crypto casinos, there is still confusion regarding the proposal, and we doubt most crypto casinos would not be pleased with the implementation of KYC. we can’t neglect the advantages of having KYC in crypto casinos as well, having KYC fosters security by ensuring the players are not using any fake identities and reducing the risk of account hacking, etc.

The Bottom Line

Implementing KYC in crypto casinos has both advantages and disadvantages, the loss of its decentralized nature and the provision to stay anonymous would be the notable change when KYC is fully implemented in crypto casinos. The advantages consist of robust security, fairness, responsible gaming, account recovery, etc. If you prefer licensed crypto casinos, then, you have to be equipped and well-prepared for the platform’s KYC protocols. 

The best and ideal way to approach KYC proceedings is to have and submit the proper and valid documents to prove the person you are. ​Giorgi Tsamalaidze, a speaker at the iGaming Crossroads Summit and Partner at PLS Law stated that by focusing on document quality, information accuracy, and adherence to specific guidelines, players could enhance the likelihood of a smooth and successful KYC verification process.