What are crypto pyramid schemes and how to avoid them?

What is a pyramid scheme?

A pyramid scheme is a fraudulent business model in which revenue is not generated by selling products or services, but by convincing new members to join. The scheme operators use the money of the newcomers to pay off the older members, moving funds within the system without creating any real value or business result. In this way, the whole scheme depends on a constant influx of new members — when they run out, the payments stop and the system collapses. Then those at the bottom of the pyramid lose the most. Pyramid schemes have been around for a long time, and one of the most famous examples is the Charles Ponzi scam from the early 20th century, after which the scams got their name. Ponzi then paid off older investors with the money of new ones, creating the impression of profitability. This scam has become so famous that the name “Ponzi scheme” is now used as a synonym for these types of scams. Laws against pyramid schemes were introduced as early as the 1930s to protect citizens, but over time, the schemes evolved and turned into multi-level marketing (MLM) models. While many MLMs are legal, regulators have introduced stricter rules to prevent abuse. The internet has further facilitated the spread of these scams and made them more difficult to identify.

Did you know? In the 1920s, Charles Ponzi lured investors by promising a 50% return on investment in just a few months, claiming to invest in international postal coupons. To maintain the scheme, Ponzi used the money of new investors to pay off the older ones, creating the illusion of profit.

Source: cointelegraph

Pyramid schemes and cryptocurrencies

Pyramid schemes with cryptocurrencies work like classic pyramid schemes. Scammers lure victims by using their curiosity for digital currencies such as Bitcoin, Ether, or Solana. A typical call looks like this: invest in a new coin and bring in more people to increase your yield. However, the project often has no real value, just like traditional pyramid schemes. These scams are usually presented as mining pools, mutual funds, or initial coin offerings or pre-sales (ICOs). A June 2023 report shows that as much as $7.8 billion was channeled into Ponzi or pyramid schemes in 2022 alone, highlighting the scale and frequency of such scams.

Source: cointelegraph

Examples of pyramid schemes with cryptocurrencies

Here are two famous examples of pyramid schemes in the world of cryptocurrencies that can help you better understand how they work:

OneCoin

OneCoin, which operated between 2014 and 2019, has been promoted as a revolutionary cryptocurrency that could become larger than Bitcoin. Investors were promised huge returns, and the project gained popularity, especially in Europe. But in reality, OneCoin was a classic pyramid scheme — profits were based solely on bringing in new members. The project did not add any real value to the world of cryptocurrencies. One of its founders, Ruja Ignatova, also known as the “Queen of Cryptocurrencies,” disappeared in 2017, while her co-founder, Karl Sebastian Greenwood, was sentenced to 20 years in prison in September 2023. years.

Bitconnect

Launched in 2016, Bitconnect promised big profits through an automated bot that was supposed to trade. Investors staked their Bitcoin in exchange for Bitconnect tokens that were used on the platform. However, Bitconnect was another pyramid scheme where “revenues” were paid out from the funds of new investors. The value of the Bitconnect token dropped drastically when the scheme collapsed, leading to huge losses for many investors. The founder, Glenn Arcaro, was sentenced to 38 months in prison in September 2022.

Did you know? In January 2023, investigative journalist Jamie Bartlett, host of The Missing Cryptoqueen podcast, revealed a potential connection between Ruya Ignatova and a luxury penthouse in Kensington, London, reigniting hopes of her arrest.

Source: cointelegraph

Differences Between Legitimate Projects and Pyramid Schemes

The key difference between a legitimate crypto project and a pyramid scheme lies in how it generates revenue. With the right projects, value comes from innovation, quality of service and real contribution to the market. These projects seek to create long-term products and services that have utility and solve specific problems. Pyramid schemes, on the other hand, depend solely on the influx of new investments to survive — without constantly bringing in new members or investments, such systems quickly collapse.

Source: cointelegraph

Warning signs for pyramid schemes

Want to recognize a pyramid scheme before it’s too late? Pay attention to these warning signs:

Promises of high returns: if someone guarantees you huge profits without any explanation of the risks, this is a big warning sign.

Focus on recruitment: if bringing in new members is the main way to make money, it’s probably a pyramid scheme.

Lack of transparency: legitimate crypto projects openly display how they operate. Be careful if you can’t get clear information about how your money will be used.

No real product or service: Pyramid schemes do not offer real value like innovative technology or useful services, but rely solely on the investments of new members.

Source: cointelegraph

How to protect yourself from pyramid schemes?

Now that you know how to recognize the warning signs, here are some ways you can protect yourself:

  • Do your research: before investing, study all the details. Who are the founders of the project? Do they have a solid reputation, or are there any warning signs? How long has the project existed? Even a short search can tell you a lot about the credibility of a project.
  • Check transparency: legitimate projects clearly explain how they work and where your money goes. Check to see if there is a “whitepaper” that describes the technology behind the project and its plan for generating revenue.
  • Avoid recruitment-focused opportunities: if the earnings are mainly based on bringing in new members, rather than the true value of the investment, it is better to stay away from such a project.
  • Check the product or service: Make sure that there is a real product or service behind the investment. If they can’t clearly explain to you how the project is making money, it’s a sign that something is wrong.

Source: cointelegraph

What to do if you have been scammed?

If you suspect that you have fallen victim to a pyramid scheme in cryptocurrencies, here’s what you can do:

  • Report fraud: Contact your local authorities or financial regulators, such as the Croatian Financial Services Supervisory Agency (HANFA) or the appropriate agency in your country. Reporting helps prevent further fraud and can lead to legal action against fraudsters.
  • Seek financial and legal advice: If you have lost money, consult a financial professional or a lawyer who specializes in fraud cases. Refunds can be difficult, but professional help can provide guidance and discover possible options.
  • Learn from experience: although it is difficult, this experience can bring you valuable lessons. Educate yourself about pyramid schemes and other scams to help you identify and avoid them in the future.

Pyramid schemes in cryptocurrencies play on people’s desire to make quick profits. Protect yourself by understanding their mode of operation and pay attention to the warning signs. Always do your research, look for transparency, and be wary of investments that are too focused on recruiting. Being informed and cautious are the best ways to avoid scams. We hope that you have learned something in today’s blog, and that you are always careful before investing your money. If you have any questions or suggestions, you can always contact us on our social networks (Twitter, Instagram).

What is a Dark Skippy attack and how to protect yourself?

Dark Skippy explanation

“Dark Skippy” is a method in which a hacked signing device secretly leaks private keys by hiding them in transaction signatures.
It targets Bitcoin hardware wallets using malware, designed to damage, disrupt, or steal information from computers or devices.
Although this type of attack is mentioned in theory, it has not been recorded in real attacks so far.
A “Dark Skippy” attack is like a skilled thief who slowly steals your cryptocurrency without you noticing, much like a pickpocket in a crowded marketplace.
It is difficult to detect because it operates silently in the background, making it extremely dangerous for cryptocurrency users.

Source: cointelegraph

How does a Dark Skippy attack work?

Dark Skippy attacks target Bitcoin signing devices, often known as hardware wallets.
When you initiate a Bitcoin transaction on your computer or smartphone, the transaction information is sent to the signing device.
This device, which keeps the private key safe within itself, creates a digital signature without revealing the secret to your computer or the internet.
Then, the signed transaction is sent back to your computer again to be published on the Bitcoin network.
However, the Dark Skippy attack exploits malware that is installed on the signing device to sneak sensitive information, such as the master secret seed, in a cunning way.
While no specific brand of wallet is targeted, criminals find ways to steal this master secret key.
In a worst-case scenario, this attack could allow hackers to gradually get their hands on your Bitcoin funds, even if they are stored on a device that is supposed to be out of the malware’s reach.

Source: cointelegraph

How to recognize a Dark Skippy attack?

If you suspect that you may be the target of a Dark Skippy attack, pay attention to these signs to protect yourself:

Unexplained small transactions: if you notice that a small amount of cryptocurrency has disappeared from your wallet without your permission, this is a serious alarm sign.
Delay in confirming transactions: If your transactions are taking longer than usual to confirm, this may indicate the presence of a problem.

Unusual device behavior: if your hardware wallet freezes funds or constantly faces technical difficulties, it may indicate that it is compromised.

Unexpected updates: If your hardware wallet suddenly prompts you to install unexpected updates, it could be an attempt to steal your funds.

By following these signs, you can detect a potential attack in time and take the necessary measures to protect your digital assets.

Source: cointelegraph

Consequences of a Dark Skippy attack

An effective Dark Skippy attack can have serious consequences if the right security measures are not taken.
Here are the possible effects of a successful attack on individuals and organizations:

Loss of funds: imagine waking up and noticing your cryptocurrency slowly disappearing from your wallet — this is exactly what makes a successful Dark Skippy attack.
For individuals, this means a direct loss of money, while for cryptocurrency companies, it can mean huge financial losses.

Loss of trust: Trust in hardware wallets is based on their top-notch security.
A Dark Skippy attack can tarnish the reputation of a wallet provider, which can drive customers away and damage the brand.

Service interruption: After an attack, a business may be forced to temporarily suspend services to resolve issues.
This means that you will not be able to buy or sell cryptocurrencies, and your funds may be locked.

Increased security costs: To prevent future attacks, you’ll likely need to invest in better security, which can be costly and time-consuming.

Source: cointelegraph

How to protect yourself?

Protecting against Dark Skippy attacks in the cryptocurrency world requires several key steps.
Here’s how you can secure your funds:

Buy from trusted sources: Get your hardware wallet directly from the manufacturer or a reputable distributor.
Avoid used devices or those from unknown sources, as they may be compromised.

Add extra security measures: Use multi-factor authentication on your accounts and devices.
This adds an extra layer of protection, making it harder for attackers to access your cryptocurrency even if they have your password.
Check for irregularities: Monitor your cryptocurrency transactions regularly.
Pay attention to small or unusual withdrawals that you have not authorized, so that you can spot potential problems in time.

Check software signatures: Some advanced hardware wallets offer the option to verify software signatures, which allows you to verify that the software is authentic and has not been modified.
If your device supports this feature, be sure to use it.

Physically protect devices: Keep your hardware wallet in a safe place.
Do not leave him unattended or allow others to approach him, as physical manipulation can compromise his safety.

Create complex passwords: If you use a password with a hardware wallet, make sure it’s strong and unique.
While it may not fully protect against Dark Skippy attacks, a strong password can make it difficult for attackers.

Educate yourself: Regularly follow the latest news about security and the best methods for protection.
Knowing new threats and how to deal with them can help you stay one step ahead of potential attacks.

These measures, while not providing complete protection, significantly reduce the risk of a Dark Skippy attack and help you safeguard your digital assets.

Source: cointelegraph

Conclusion

The Dark Skippy attack poses a serious threat in the cryptocurrency world, especially for those who rely on hardware wallets to keep their funds safe.
This sophisticated attack can gradually deplete your digital assets without your knowledge, leaving you with serious financial losses.
Recognizing early signs of an attack, such as unexplained transactions and unexpected device behaviors, is crucial for a timely response.
Protecting against such threats requires adhering to the best security methods, such as purchasing wallets from trusted sources, using multi-factor authentication, regularly checking transactions, and being educated about the latest security threats.
While no measure is perfect, these strategies can significantly reduce the risk of a Dark Skippy attack and help you manage your cryptocurrencies safely.
We certainly hope that you will apply these methods to protect your funds, and that you have learned something new in today’s blog. If you have any questions, you can always contact us on our social networks ( Twitter , Instagram ).

What is a crypto vault and how does it work?

Crypto Vault

Crypto vaults represent a new innovation in the field of digital asset protection, by offering improved security compared to traditional “hot” wallets or exchange accounts.
These hardened digital vaults are designed to keep cryptocurrencies offline, protecting them from the constant threat of online attacks.
With multiple layers of security, including multisignature authentication, delays when withdrawing funds, and cold storage solutions, crypto vaults provide peace of mind for investors who care about the safety of their funds.
Unlike hot wallets that are connected to the internet, crypto vaults are mostly offline, making them significantly less vulnerable to hacking attempts.
This approach, separate from the network, adds a strong layer of protection against unauthorized access, phishing scams, and malware attacks.
Many crypto vaults also use advanced encryption techniques and require multiple authorizations for transactions, further strengthening their security profile.
Whether you’re an experienced crypto investor or just starting out, a crypto vault can be a valuable tool for knowing how to protect digital assets.

Source: cointelegraph

Types of Crypto Vaults

There are several types of crypto vaults that offer different security features and functionalities for storing digital assets, including smart contracts, time-locked, multisignature, and hybrid vaults.

Crypto vaults that use smart contracts – use blockchain technology to automate security measures through predefined code, thereby improving control and transparency over digital assets.

Time-locked vaults introduce delays when withdrawing funds to prevent impulsive actions and unauthorized access attempts.
Both options offer customizable security settings to users.

Multisignature vaults require multiple transaction approvals, which increases security through collaboration and consensus.

Hybrid vaults combine “hot” and “cold” storage features, providing convenience for smaller transactions and strong security for larger funds.
This balanced approach caters to the diverse needs of users by offering flexible security options.

Source: cointelegraph

How Does a Crypto Vault Work?

Crypto vaults use offline storage and robust security protocols to protect digital funds when making deposits, transactions, and withdrawals.
The process usually begins when a user transfers cryptocurrencies from a hot wallet or exchange to a vault address, thereby transferring the funds to a more secure environment.
Once stored, cryptocurrencies are kept secure with a combination of offline storage methods, such as hardware wallets or devices without network connectivity, encryption protocols, and multisignature authentication.
This combination ensures that funds are protected from unauthorized access and online threats.
When a user wants to withdraw funds or initiate a transaction, the vault’s security mechanisms are activated.
These mechanisms vary depending on the type of vault and may include smart contract execution, time delays, or multiple approvals.
This process ensures that transactions are authorized and legitimate.
After successful authorization and completion of the necessary delays, the vault releases a certain amount of cryptocurrency to the selected address, generating a transaction on the blockchain network, making it transparent and verifiable.
To maintain the highest level of security, reputable vault service providers regularly conduct oversight and audit procedures, including security checks, vulnerability assessments, and transaction record-keeping, ensuring the continued integrity and security of the vault system.

Source: cointelegraph

What is the difference between a crypto wallet and a vault?

Crypto wallets, whether online (hot) or offline (cold), are primarily designed for regular transactions and the management of smaller amounts of cryptocurrencies.
They focus on convenience and ease of use, allowing users to send, receive, and manage funds quickly.
However, their constant connection to the internet or potential physical theft makes them more vulnerable to hacking attempts and unauthorized access.
Crypto vaults, on the other hand, function as hardened digital vaults, with priority on security.
They use multiple layers of protection, including offline storage, multisignature authentication, withdrawal time delays, and advanced encryption.
This makes them significantly more resilient to hacking, phishing attacks, and other online threats.
Crypto vaults are ideal for long-term storage of larger amounts of cryptocurrencies, as they offer enhanced security and peace of mind to users.

Source: cointelegraph

Benefits of Crypto Vault

Crypto vaults offer enhanced security features that surpass those typical of wallets.
The use of measures such as multi-signature authentication, where multiple parties must approve a transaction, makes unauthorized access significantly more difficult.
This extra layer of protection significantly reduces the risk of losing funds due to hacking, theft, or unauthorized access.
Additionally, time delays when withdrawing funds create a time gap that allows users to spot and potentially reverse fraudulent transactions.
These robust security protocols provide an extra layer of protection for your digital assets.
In the world of cryptocurrencies, unauthorized access poses a serious threat, but crypto vaults are designed to reduce this risk.
Thanks to the requirement for multiple approvals and the inclusion of time locks, they create significant barriers for unauthorized persons trying to take control of funds.
The advanced encryption protocols used in crypto vaults further secure private keys and sensitive data, making theft extremely difficult for hackers.
Many crypto vaults also offer offline storage options, such as cold storage wallets, which means that the private keys and sensitive data associated with the user’s cryptocurrencies are disconnected from the online network.
This eliminates a significant point of vulnerability and ensures the security and integrity of crypto assets.

Source: cointelegraph

Risks Associated with Crypto Vaults

While crypto vaults are very secure, they come with certain trade-offs.
Their emphasis on security often results in reduced availability and control compared to regular wallets.
Withdrawals of funds from vaults may require multiple approvals or time delays, which may be less convenient for users who need quick access to funds.
Additionally, the technical complexity of setting up and managing a vault can be a hurdle for some users, which can lead to errors.
Also, there is a risk associated with the vault service provider.
If the provider experiences security lapses, technical failures, or bankruptcy, the user’s funds may be at risk.
Recovering lost credentials or vault access can be difficult due to limited customer support or recovery mechanisms.
Additionally, some providers charge fees, which users should consider when weighing the benefits of improved security against the cost and potential risks.

Source: cointelegraph

Conclusion

Crypto vaults offer an outstanding level of security for digital assets, providing robust safeguards such as multisignature authentication, time delays, and offline storage.
These features make them an ideal solution for long-term storage of larger amounts of cryptocurrencies, protecting funds from unauthorized access and online threats.
However, it is important to be aware of the possible risks.
Reduced availability, technical complexity and potential problems with service providers can pose challenges.
The costs associated with vault services and the possibility of technical problems should also be taken into account.
As a result, while crypto vaults offer strong protection for your digital assets, it is recommended that users carefully weigh all of the pros and cons before making a decision.
Balancing security and convenience is the key to optimally managing your crypto holdings, and for now, it seems that crypto vaults will remain somewhat more inaccessible to the wider masses due to their complexity.
Of course, you can share your opinion on crypto vaults, as well as any questions or suggestions, with us on our social networks (Twitter, Instagram).

Infinite Mint Attack – What Is It and How Does It Work?

Infinite Mint Attack – Explained

An infinite mint attack occurs when an attacker manipulates the code of a smart contract to continuously create new tokens, exceeding the allowed supply limit.
Such attacks are most common in decentralized finance (DeFi) protocols, where they seriously violate the integrity and value of a cryptocurrency or token by creating an infinite amount of it.
An example of this is the attack on the Paid network, where a hacker exploited a vulnerability in a smart contract to mint and burn tokens, leading to a loss of $180 million and an 85% drop in the value of PAID tokens.
Such attacks highlight the importance of thorough code checks and incorporating security measures into the development of smart contracts to prevent such exploits.

Source: cointelegraph

How does infinite mint attack work?

An infinite mint attack works by exploiting vulnerabilities in smart contracts, especially in token-creating functions.
The first step in an attack is to identify vulnerabilities, where the attacker finds logical weaknesses in the contract, often related to input verification or access control mechanisms.
Once the vulnerability is discovered, the attacker creates a transaction that exploits this weakness, allowing new tokens to be created without the necessary authorization or verification.
This is followed by exploitation, where an attacker changes parameters, executes specific functions, or uses unexpected interactions within the code to trigger a vulnerability.
As a result, there is unlimited token creation, which the attacker then quickly sells on the market, causing inflation and a sharp drop in the value of the original token.
This unexpected influx of tokens into circulation can seriously harm investors and users associated with the cryptocurrency in question, as prices can drop over 90% in just a few minutes.

Source: cointelegraph

Consequences of an infinite mint attack

An infinite mint attack has serious consequences, including a rapid devaluation of the token’s value, financial losses, and disruption of the entire ecosystem.
By creating an infinite amount of tokens, the value of the affected asset is instantly reduced, and causes large losses for users and investors.
This attack violates the integrity of the entire ecosystem, reducing trust in the blockchain network and associated decentralized applications.
An attacker can profit by selling inflationary tokens before the market reacts, leaving others with worthless tokens.
For example, during the attack on Cover Protocol in December 2020, the token’s value dropped from over $700 to less than $5 in a matter of hours, with heavy financial losses for investors.
Such a drop in value can destabilize the entire ecosystem, including DApps, exchanges, and other services that depend on the stability of the token, and lead to legal problems and regulatory control over the project, although by this point it is already too late.

Source: cointelegraph

How to prevent an infinite mint attack?

Preventing an endless mint attack requires a comprehensive approach that puts security first at all stages of a crypto project.
A key measure is to conduct thorough and regular audits of smart contracts by independent security experts, who will check the code in detail for vulnerabilities that could allow the creation of an infinite amount of tokens.
Also, it is essential to ensure strong access controls, where minting powers are granted only to authorized parties, with the use of multisignature wallets for added security.
The implementation of real-time tracking tools allows for a quick response to potential attacks, detecting unusual transactions or sudden increases in the amount of tokens.
Additionally, projects should have emergency plans in place to quickly deal with potential attacks and minimize damage, including open communication with exchanges, wallet providers, and the wider community to anticipate issues and plan solutions.

Source: cointelegraph

Conclusion

The infinite mint attack poses a serious threat to crypto projects, investors, and the entire decentralized finance ecosystem.
Understanding how these attacks work and what consequences they can have is crucial for building more resilient and secure blockchain networks.
Prevention through regular security audits, strict access controls, and quick response to suspicious activity can significantly reduce the risk of these attacks.
As the cryptocurrency industry continues to grow, the need for strong security measures will also be critical to protecting value and trust within the community. We hope you enjoyed reading today’s blog, and that you learned something new. If you have any questions or suggestions, you can always contact us on our social networks (Twitter, Instagram).

How do crytpo whales protect their identities?

Origin of crypto whales (whale)

In the world of cryptocurrencies, there are entities known as “whales” (Eng. whale) that possess enormous power and influence on the market.
These crypto whales are individuals or entities with significant amounts of cryptocurrency.
Tracking their wallets on the blockchain explorer has historically been extremely useful for understanding market sentiment.
The moves of whales, from large transactions to strategic moves, can cause waves throughout the crypto world.
Crypto whales emerged in parallel with the growth of cryptocurrencies, especially Bitcoin, in the early 2010s.
Many early adopters and investors accumulated substantial amounts of currencies when prices were relatively low.
As the value of cryptocurrencies has grown, these investments have turned into enormous wealth that now gives these entities a lot of power.
Some whales have also gained their status through large investments or mining.
A crypto kit typically owns several million dollars worth of cryptocurrencies.

Source: cointelegraph

Tools to Monitor Crypto Whales Activity

There are several tools and platforms for monitoring crypto whale activity, providing valuable insights for investors and analysts, including blockchain explorers, on-chain analytics, and social media monitoring tools.
Monitoring whale activity is not only useful, but it often becomes mandatory when someone is deeply involved in crypto.
Monitoring whale activity offers several benefits for investors and market participants:

  • Understanding whale behavior provides insights into market trends, potential price movements, and investor sentiments.
  • Identifying large transactions or whale movements can help manage risk by predicting market movements.
  • The activity of whales in an ecosystem or cryptocurrency often indicates future price movement, which can be useful in planning for entering and exiting the market.

The various tools for monitoring whale activity are explained below:

Blockchain explorers

Platforms like Etherscan and Blockchain.com allow users to research and analyze blockchain transactions, including those involving large amounts of cryptocurrencies.

Whale Warning Services

Special services like Whale Alert track and report significant transactions in real-time, highlighting whale activity.

Social Media Monitoring Tools

Monitoring social media and forums can also reveal insights into whale sentiments and decisions, i.e. potential market movements.

Source: cointelegraph

Privacy Measures

Crypto whales often take measures to protect their identities and privacy due to the public nature of blockchain transactions.
They use a variety of strategies to protect their identity, including using multiple wallets, private cryptocurrencies like Monero, etc.

Multiple wallets

Crypto whales often spread their assets across multiple wallets to avoid centralizing assets in one place.
By spreading assets across different wallets, they can blur the total amount of cryptocurrencies they own.
This strategy adds a layer of security and privacy, making it difficult for outside observers to track their transactions and possessions.

Private cryptocurrencies

Privacy-focused cryptocurrencies, such as Monero (XMR), Zcash (ZEC), and Dash (DASH), offer enhanced privacy features compared to cryptocurrencies such as BTC and ETH.
Whales can use these currencies for transactions to obfuscate the source, destination, and amount of funds involved in transactions.
This anonymity makes it difficult for outside parties to trace transactions to specific individuals or entities.

Offline wallets

Whales often store a significant portion of their cryptocurrencies in offline wallets, known as cold wallets or hardware wallets.
These wallets are not connected to the internet, which reduces the risk of hacking or unauthorized access.
By keeping assets offline, whales can protect their holdings from online threats and maintain control of their private keys, which are crucial for accessing and managing their cryptocurrencies.

Legal entities

Some crypto whales choose to hold their assets with legal entities such as corporations, trusts, or offshore companies.
By using these entities, they can protect their personal identities from public scrutiny.
Additionally, holding assets through legal structures may offer tax benefits or asset protection benefits, depending on the regulatory environment.

Tax havens for cryptocurrencies

Crypto whales can take advantage of tax havens — areas with favorable tax policies and regulations for financial activities — to manage their tax liabilities and improve privacy.
Tax havens often offer lower or zero tax rates on certain types of income, including capital gains from cryptocurrency investments.
Whales may set up entities or accounts in these areas to take advantage of tax incentives and maintain the confidentiality of their financial affairs.

Source: cointelegraph

Anonymity and legislation

Government authorities around the world monitor crypto transactions to enforce sanctions and identify illegal activities such as terrorist financing.
Increased anonymity can make these efforts more difficult.
It’s important to note that while the above strategies can improve privacy and security for crypto whales, they also create regulatory issues.
Tax authorities and regulatory agencies are increasingly focusing on crypto transactions, including the fight against money laundering, tax evasion, and illegal activities.
Violating tax, anti-money laundering (AML), and know-your-customer (KYC) laws can lead to hefty fines, asset seizure, or even criminal charges.
The whale’s reputation can suffer if they are associated with unethical or illegal activities, which can make it difficult for them to operate in legitimate financial networks.
Crypto whales face the problem of finding a balance between the ever-changing regulatory environment and the desire for privacy.
Whales must navigate through these legal complexities and ensure that they comply with relevant laws and regulations, even when using privacy-enhancing measures.
Maintaining anonymity can be crucial for security and privacy reasons, especially given the attention and scrutiny often focused on high-profile cryptocurrency owners.

Source: cointelegraph

Conclusion

Crypto whales play a crucial role in the crypto world, using their significant assets to shape market trends and influence the value of cryptocurrencies.
Monitoring whale activity provides valuable insights for investors and analysts, but it also poses challenges in terms of privacy and legislation.
Whales use a variety of strategies to protect their identities, including the use of multiple wallets, private cryptocurrencies, and offline storage, while navigating complex regulatory requirements.
While maintaining anonymity is essential for security, it is important to align these measures with legal obligations to avoid sanctions and preserve reputation.
Ultimately, balancing between privacy and compliance remains a key challenge for crypto whales in an increasingly sophisticated and regulated market. We hope you enjoyed reading today’s blog, and that you learned something new. If you have any questions or recommendations, you can always contact us on our social networks (Twitter, Instagram).

What is a rug pull and how to avoid it?

What is Rug Pull?

A rug pull is a form of crypto fraud that manifests itself when a project team artificially inflates the value of their token, only to suddenly withdraw funds, leaving investors with tokens that have no value. This process often involves the creation of a new crypto token by scammers, who then manipulate the market to inflate its price. Once they reach the desired price, they quickly withdraw the invested funds, causing the value of the token to drop rapidly, often to zero. Rug pull is particularly dangerous because it takes advantage of decentralized finance (DeFi), where traditional methods of verification and regulation are less present. Understanding the different forms of rug pull fraud is key to recognizing them and avoiding potential financial losses, so in today’s blog you will find out what all these forms of rug pull are and how to avoid them.

Source: cointelegraph

Types of rug pulls

In the world of cryptocurrencies, there are three basic types of rug pull scams that investors need to know to help protect themselves:

  • Liquidity theft: this type of fraud occurs when token creators suddenly withdraw all funds from the liquidity pool, thereby eliminating all the value that investors have invested in the token. This results in the token’s price dropping to zero, often leaving investors with worthless digital assets. Liquidity theft is particularly common in decentralized finance (DeFi), where such manipulations are easier to perform due to the lack of centralized oversight, and often the anonymity of the creators.
  • Limit sell orders: this method involves programming tokens in such a way that only creators can make a sale. After investors buy the token, developers wait for the price to rise and then sell their holdings, leaving investors with tokens that no longer have value. An example of such a scam is the case of Squid Token, where the developers took advantage of the hype around the popular TV series to lure investors before performing a rug pull.
  • Dumping: this term refers to a situation where developers sell large amounts of tokens very quickly, leading to a drop in price. While buying and selling one’s own tokens is common, dumping becomes problematic when done over a short period of time, often after intense promotion, resulting in a pump-and-dump scheme.

Source: cointelegraph

Hard and soft rug pulls.

Rug pulls can be divided into two categories: hard and soft rug pulls. Hard rug pulls are those that involve directly manipulating the code of tokens or smart contracts to enable fraud. Examples include malicious backdoors in smart contracts, where developers plan fraud in advance and implement hidden exploits that allow them to withdraw funds without the investor’s knowledge. Liquidity theft, where token creators suddenly withdraw all funds from a liquidity pool, falls into this category. These types of rug pulls are usually clearly illegal because the intention of the project is obvious from the beginning. On the other hand, soft rug pulls refer to situations where developers quickly sell off their holdings in tokens, often after inflating them to high values. While this can be unethical, it’s not always clear if it’s a crime. Asset dumping can leave investors with devalued tokens, but without clear malicious intent or direct code manipulations, soft rug pulls sit in a gray area between unethical behavior and illegal activities.

Source: cointelegraph

Are rug pulls illegal?

Crypto rug pull scams represent a complex area when it comes to legality. While hard rug pulls are clearly illegal because they involve intentional malicious activities such as stealing liquidity and programming hidden exploits into smart contracts, soft rug pulls are in an unknown zone. They are unethical, but not necessarily illegal. For example, if a project promises donations and then keeps the funds raised, this is unethical, but it may not be illegal. The complexity of tracking and prosecuting such scams stems from the decentralized nature of the crypto industry. The case of the collapse of the Turkish crypto exchange Thodex, where $2 billion was stolen, stands out as one of the biggest rug pull incidents. Despite the fact that Turkish police have detained 62 people in connection with this case, the main suspect has still not been found. Other examples that illustrate this issue include protocols such as Meerkat Finance, AnubisDAO, Compounder Finance, and Uranium Finance, which have also been victims of rug pull scams. These cases show how rug pulls can have serious consequences for investors and require caution when investing in crypto projects.

Source: cointelegraph

How to avoid a rug pull?

There are several clear signs that investors can look out for to protect themselves from rug pull scams, such as unlocked liquidity and lack of external audit. The following are six signs that users should look out for to protect their assets from crypto rug pull scams:

Unknown or anonymous developers

Investors need to consider the credibility of the people behind new crypto projects. Are developers and promoters famous in the crypto community? What is their success so far? If the development team is public but not well known, are they still acting legitimately and able to deliver on their promises? Investors should be skeptical of new and easily faked social networks and profiles. The quality of the project’s whitepaper, website, and other social networks should provide clues about the overall legitimacy of the project. The anonymous developers of the project could be an indicator that it is a scam. Although it is true that the original and largest cryptocurrency in the world was developed by Satoshi Nakamoto, who still remains anonymous, but his code has always been publicly available and immutable.

Unlocked liquidity

One of the easiest ways to distinguish a scam cryptocurrency from a legitimate one is to check if the currency is locked in liquidity. Without a liquidity lock on the token supply, nothing is stopping the project’s creators from running away with all the liquidity. Liquidity is provided through time-locked smart contracts, ideally lasting three to five years. While developers can create time locks themselves, third parties that provide locks can provide more security. Investors should also check the percentage of the liquidity pool that is locked. A lock is only useful in proportion to the amount of liquidity pool it provides. Known as total value locked (TVL), this number should be between 80% and 100%.

Sales Restrictions

A scammer may code a token to limit the ability to sell to certain investors but not others. These sales restrictions are the hallmarks of a fraudulent project. Because sales restrictions are hidden in the code, it can be difficult to identify if there is fraudulent activity. One way to test this is to buy a small amount of a new token and then try to sell it right away. If there are problems selling what has just been purchased, the project is probably a scam.

Drastic price increase with a limited number of token holders

Sudden large fluctuations in the price of a new token should be viewed with caution. This, unfortunately, is true if the token does not have locked liquidity. Significant price spikes in new DeFi tokens are often “pump” signs before a “dump.” Investors skeptical of the token’s price movement can use the block explorer to check the number of token holders. A small number of owners makes the token susceptible to price manipulation. Signs from a small group of token holders can also mean that a few “whales” may sell their positions and cause serious and immediate damage to the token’s value.

Suspiciously high yields

If something sounds too good to be true, it probably is. If the yields for the new token seem suspiciously high, but it doesn’t turn out to be a rug pull, it’s probably a Ponzi scheme. When tokens offer an annual percentage return (APY) in the triple digits, even though this is not necessarily indicative of fraud, these high returns usually mean an equally high risk.

Lack of external audit

It is now common practice for new cryptocurrencies to go through a formal code audit process conducted by a reputable third party. One famous example is Tether (USDT), a centralized stablecoin whose team did not detect that it held non-fiat-backed assets. The audit is especially important for decentralized currencies, where a standard audit for DeFi projects is mandatory. However, potential investors should not simply take the word of the development teams that the audit has been done. The audit should be able to be verified by a third party and show that nothing malicious was found in the code.

Source: cointelegraph

Recognizing Crypto Rug Pull Scams

In 2021. An estimated $7.7 billion was stolen from investors in rug pull crypto scams. These investors believed they were investing in legitimate projects, but in the end, it turned out to be scams. Before investing, it is worth taking the time to research new cryptocurrencies and conduct a thorough analysis before investing in a new project, and only a detailed analysis can lead to a conclusion whether it is a scam or a legitimate project. Feel free to write to us on our social networks if you have ever encountered any rug pull, or any other crypto scam. Also, if you have any questions or suggestions, feel free to contact us (Twitter, Instagram).

New regulation of the European Union

What are we talking about today?

The recently adopted provisions of the European Union, which entered into force on 19 March 2024, represent a significant shift in the regulation of cryptocurrencies , especially in the area of ​​the European Union. These new measures bring stricter limits and standards that will have a far-reaching impact not only on individual users but also on large institutions and companies. In today’s blog, we consider the key aspects of these provisions and investigate how they will affect the future of business and privacy in the world of cryptocurrencies, and we will try to find out whether the European Union regulation is logical, or if it still harms the majority of users, and thus the organization itself.

Source: cointelegraph

Newly adopted decisions

The European Union’s new anti-money laundering laws restrict cash and some crypto transactions, but the proposed restrictions on unregistered wallets are still not included in the final version. A majority of leading members of the European Parliament’s committee dropped the €1,000 ($1,080) cap on cryptocurrency payments from private and anonymous crypto wallets as part of new anti-money laundering laws. On the 19th In March, the Committee on Economic and Monetary Affairs of the European Union and the Committee on Civil Liberties, Justice and Home Affairs adopted the Anti-Money Laundering Regulation (AMLR), on which the European Council and Parliament reached a provisional agreement in January. An earlier proposal that limited transactions to amounts of less than 1,000 euros when using a private wallet for transactions was removed along with a provision aimed at implementing identity checks on private wallets. However, crypto exchanges, called crypto asset service providers (CASPs) in the EU, must carry out user identity checks – for users making business transactions of at least €1,000.

The law works alongside other crypto-market-focused legislation, such as Market Regulation ( MiCA ) and others, to reinforce existing bans on CASPs (exchanges) providing accounts to anonymous users or trading cryptocurrencies such as Monero (XMR), which hide information about transactions, i.e. they have private transactions. CASPs (exchanges) must also “apply mitigations” to transactions between their platform and the private wallet – where users hold their private keys – which includes at least verifying the identity of the wallet owner where funds from the exchange wallet were sent. The laws capped cash payments at $10,800 (€10,000) – with the option for EU member states to set lower limits – and banned anonymous cash payments above $3,240 (€3,000). AMLR is expected to be fully operational within three years – sometime in 2027. – after receiving approval from the Council of the EU and the plenary session of the European Parliament, which is scheduled for 10 April.

Source: cointelegraph

How will this affect users?

The new regulation of cryptocurrencies of the European Union brings significant changes for users of crypto wallets and exchanges. Users will have to adapt to stricter identification rules when making transactions of more than 1,000 euros. This could reduce the anonymity that some users have valued in the crypto space, but at the same time it increases the transparency and security of transactions. With cash withdrawals limited to €10,000 and a total ban on anonymous cash withdrawals above €3,000, users will have to rely more on bank transfers and other forms of digital payments. These measures should help fight money laundering and terrorist financing, but may also lead to increased administrative burdens and costs for users and service providers. Ultimately, the regulation aims to create a safer and more stable crypto environment, which could encourage greater trust and wider adoption of cryptocurrencies in Europe. On the other hand, there is a possibility that many users will see this new regulation as excessive, and simply choose another place of residence where the crypto regulation is much milder. There are numerous countries that have a much more liberal approach to the regulation of cryptocurrencies, and you can read about them in our blog .

Source: cointelegraph

What happens to private wallets?

With the new regulations, private wallets, which until now have allowed users to hold and transfer cryptocurrencies anonymously, will face greater scrutiny. Although the original restrictions on private wallet transactions of less than 1,000 euros were not approved in the final version of the law, exchange offices (CASPs) will be forced to carry out identity checks for transactions involving private wallets and amounts of 1,000 euros or more. This means that users who want to make larger transactions will have to reveal their identity, reducing the level of privacy that private wallets have provided.

Source: cointelegraph

Conclusion

The new regulations of the European Union represent a significant step towards the future of cryptocurrency regulation. By removing the limit on private wallets of less than 1,000 euros, the EU has shown flexibility to the needs of small investors who found this earlier proposal absurd, while at the same time introducing stricter identification measures for larger transactions. These changes are likely to increase transparency and security in the crypto market, but may also limit the anonymity that some users have valued and create a negative image of the European Union among crypto enthusiasts. Given that AMLR will be fully operational only in 2027. year, crypto companies and users have time to adapt to the new rules. How these measures will affect the crypto market in the EU zone remains to be seen. On our social networks, you can write us your opinion about these laws, do you think they are directing European countries in the right direction, or do you still think that less regulation is needed, i.e. a freer market. Likewise, if you have any suggestions, you can always contact us on our social networks ( Twitter , Instagram ).

Bitcoin without internet

What are we talking about today?

Bitcoin is a fully digital currency. Have you ever wondered what would happen if we ran out of internet or electricity, which are necessary for the functioning of the Bitcoin network? How would Bitcoin survive such a scenario? How would we send and receive Bitcoin without the Internet? In this blog we will explore these interesting and important topics.

Source: cointelegraph

Internet or power failure

To answer the question right away, if all the nodes in the world lost their data, then Bitcoin would no longer be able to function. But how likely is this? We have over 17,500 nodes distributed all over the world. There is some minimal possibility that some totalitarian regimes will restrict access to the Internet or the electricity grid, but it is unlikely that this will happen on a global scale. So it is technically possible to destroy Bitcoin by shutting down the internet or electricity for the entire world, but it is impractical. However, as we have already said, there are various scenarios that could cause the internet to disappear in certain regions or countries. This could be due to natural disasters, wars, cyber-attacks, political decisions or technical failures. So what would happen to Bitcoin in those areas?

Bitcoin is a decentralized system that does not depend on a single central point. It consists of a network of nodes that confirm transactions and maintain the security and integrity of the system. Each node has a copy of the entire transaction history, called the blockchain. If there was an internet outage in some regions, it would not affect the Bitcoin network in other regions. Other nodes would continue to work and keep Bitcoin alive. When the Internet returned in those regions where it was not there, the nodes would synchronize with the rest of the network (that is, download the data they missed while they had no Internet) and continue to function normally. Bitcoin would recover from an internet outage and continue to work as before, and during this internet outage the only consequence would be slightly slower execution of transactions.

Source: cointelegraph

Send and receive bitcoins without internet

There are different ways to use bitcoin without the internet, and one of them is to send it via SMS. This method is especially useful in areas where there is no stable or available internet connection, as is the case in some parts of Africa, and we will take Nigeria as an example. How exactly does this work?

In order to send or receive bitcoin via SMS, you need to have a regular mobile phone that supports the USSD protocol (older mobile phones specific to these countries), which is used to send text messages. Also, you need to have an account on a service that allows you to send bitcoins via SMS, such as Machankura. Machankura is the first African service that allows sending and receiving bitcoins over a GSM network, which is independent of the Internet. Machankura uses Bitcoin’s Lightning network, which enables faster and cheaper transactions, and connects users’ lightning addresses with their phone numbers. In order to send bitcoins via SMS, you need to enter the corresponding USSD code, which differs depending on the country. Then you need to select the option to send bitcoins, enter the recipient’s phone number and the amount you want to send. After that, it is necessary to confirm the transaction and enter the PIN code. The transaction will be completed within a few seconds, and the recipient will receive an SMS message with confirmation and the balance of their account. The phone number serves as a public address for receiving bitcoins. In this way, sending bitcoins via SMS is a simple and practical way to use bitcoins without the Internet. This method provides access to bitcoin to millions of people who do not have smartphones or an internet connection, but have ordinary mobile phones. Also, this method increases the security and privacy of transactions, because it does not require the disclosure of personal data or the use of Internet services that can be hacked or censored. Bitcoin without the Internet is possible and accessible thanks to innovative solutions such as Machankura, which provides its services in as many as 8 countries in Africa.

Source: cointelegraph

Other ways to send bitcoins without internet

Sending bitcoins via SMS isn’t the only way to use bitcoins without the internet. There are other alternative ways that use different technologies to transfer bitcoins. Two of them are sending bitcoins via radio waves and via satellite.

Sending bitcoins via radio waves is a method that uses radio stations to broadcast bitcoins via electromagnetic waves. This method is especially useful in case of censorship or blocking of the Internet by the authorities. In order to send bitcoin via radio waves, it is necessary to have a radio transmitter and receiver, as well as special software that enables coding and decoding of bitcoins into sound signals. Also, it is necessary to use Bitcoin’s Lightning network, which enables faster and cheaper transactions. This method has already been tested in practice, when two bitcoin developers successfully sent bitcoin over a distance of 4000km using radio waves.

On the other hand, sending bitcoins via satellite is a method that uses a satellite network to broadcast bitcoins over space waves. This method is especially useful in areas where there is no stable or available internet connection, as well as for increasing the security and resilience of the Bitcoin network. In order to send bitcoin via satellite, it is necessary to have a satellite receiver and antenna, as well as special software that enables access and synchronization with the Bitcoin network. Also, it is necessary to use the ZeroSync protocol, which enables quick and easy sending of bitcoins using zero-knowledge proofs. This method has also already been implemented in practice, when Blockstream, a company engaged in improving Bitcoin functionality, launched its Blockstream Satellite, which provides free global access to Bitcoin by broadcasting the blockchain via satellite.

All these are proofs that sending bitcoins without internet is possible and available thanks to different alternative methods. These methods enable access to bitcoin to millions of people who do not have an Internet connection, but have other, in most cases, much cheaper equipment. These are all great methods for spreading Bitcoin adoption to poor areas where it is most needed.

Source: cointelegraph

Conclusion

In this blog, we have seen that Bitcoin is more than a digital currency that depends on the Internet. Bitcoin is a resilient and adaptable system that can function without the Internet, using various alternative methods to send and receive bitcoins. These methods include sending bitcoins via text message, via radio waves, and via satellite. Thanks to these same methods, millions of people who would otherwise not be able to use Bitcoin, but also other financial services such as banks and the like, have access to bitcoin. We hope that you enjoyed reading today’s blog, and that you learned something new. If you have any questions or suggestions, you can always contact us on our social networks ( Instagram , Twitter ).

Seed Phrase – Cryptocurrency Security Key

What is a seed phrase?

A seed phrase is a string of words that serve as a password to access your crypto wallet. This phrase allows you to recover your wallet and crypto assets even if you lose your password, phone or hardware device. The seed phrase acts as the master password, so you should write it down and keep it in a safe place. The words in the seed phrase are randomly generated when setting up your wallet. Therefore, this phrase should be written down and kept in a safe place (physically stored, not on your computer/mobile phone) so that you can use it when needed.

Source: cointelegraph

How does the seed phrase work?

The seed phrase works on the principle of BIP-39, which stands for Bitcoin improvement proposal-39. It is the standard way to generate and use seed phrases in crypto wallets. BIP-39 contains a list of 2048 words that can be used to create seed phrases. Each word has its own number from 0001 to 2048. And each seed phrase consists of 12, 18, or 24 words randomly selected from that list. This means that all seed phrases in the world contain words from that list only. However, the number of possible combinations is huge, so it is very unlikely that someone will guess your seed phrase. That is why it is important to keep it in a safe and secret place, because it is your key to access your crypto wallet and your crypto assets.

Source: cointelegraph

How secure are seed phrases?

Seed phrases are extremely safe, and the probability that someone will guess exactly our seed phrase is extremely small. As we saw in the previous paragraph, the number of possible combinations for a 24-word seed phrase is 2048 to the twenty-fourth, which is about 2.96*10 79 . It is a huge number that is hard to imagine. To compare it with some other probabilities from the world, we can cite some examples:

The odds of winning a week on the lotto are about 1 in 14 million.

The probability of being struck by lightning is about 1 in 500 thousand.

The odds of becoming president of the United States are about 1 in 10 million.

As we can see, all these probabilities are much higher than the probability of someone guessing our seed phrase. In fact, the probability of someone guessing our seed phrase is less than the probability of flipping a coin and getting heads 256 times in a row. So, we can conclude that seed phrases are very safe, provided that we keep them in a safe and secret place, because whoever knows our seed phrase also has access to our crypto wallet, i.e. funds.

Source: cointelegraph

Supercomputers and seed phrases

Supercomputers are very powerful computer systems that can perform a huge number of operations per second. They are used to solve complex problems in science, engineering, medicine and other fields. Supercomputers are also of interest to the crypto community, as they could theoretically attempt to crack the security of seed phrases. Namely, the supercomputer could try all possible combinations of words from the BIP-39 list and try to find those that correspond to existing crypto wallets. However, this would be a very difficult and time-consuming endeavor, as the number of possible combinations would be too large even for the fastest supercomputers. By some estimates, it would take more than 10^18 years to crack a 24-word seed phrase using a supercomputer. So, we can conclude that seed phrases are very secure and resistant to super computer attacks. However, this does not mean that we should not be careful and follow the development of technology. In the future, even faster and more powerful computers, such as quantum computers, may emerge, which could pose a greater threat to security. That is why it is important that the crypto community constantly works to improve and adapt its protocols and algorithms, in order to ensure the highest level of protection for its users. If it happens that seed phrases become ineffective or insecure, we will probably switch to a more secure and modern system, which will allow us to continue using cryptocurrencies without fear of loss or theft.

Source: cointelegraph

Conclusion

In this blog, we learned what a seed phrase is, how it works, how secure it is, and what the future of seed phrases is because of supercomputers. A seed phrase is a string of words that serve as a password to access our crypto wallet and our crypto assets. It is generated randomly from a list of 2048 words, which is standardized according to the BIP-39 protocol. It can have 12, 18 or 24 words, depending on our choice. The seed phrase is very safe because the probability of someone guessing our seed phrase is extremely low. We hope you found this blog useful and interesting. Thank you for reading, and if you have any questions or comments, feel free to post them on our social networks ( Twitter , Instagram ).

What is KYC (Know Your Client)

Generally

“Know your client” (eng. Know Your Client (KYC) is a standard in the investment industry that ensures that a financial service provider (in the case of cryptocurrencies centralized exchange) can verify the identity of the client and ensure that the client does not use the service for money laundering or other illegal actions. This protocol is applied at the beginning of the relationship between the client and the broker (exchange office) in order to establish the basic personal profile of each client. The client is also brought to the attention of the need to comply with all laws, regulations and rules of the industry.

Source: cointelegraph

KYC and crypto currencies

One of the main characteristics of cryptocurrencies is that they are a decentralized alternative to centralized banking. However, this feature poses a challenge in preventing money laundering. Criminals see cryptocurrencies as a means of money laundering, and in response, state authorities are looking for ways to impose KYC under the obligation on cryptocurrency markets. Requiring cryptocurrency platforms to verify the identities of their users would be consistent with financial institutions, and while it is still not mandatory, many crypto platforms have implemented KYC. In early 2021. In 2011, FinCEN (U.S. Office of Combating Money Laundering) proposed that providers in the cryptocurrency and digital asset swaps market submit, maintain and verify the identities of their users. This proposal would classify certain cryptocurrencies as monetary instruments, subjecting them to KYC requirements. The idea behind this is that cryptocurrencies are not classified as currencies, i.e. money, but as financial instruments (stocks, bonds…), which of course does not coincide with the understandings of crypto enthusiasts, who believe that cryptocurrencies are the next form of money.

Source: cointelegraph

Does KYC affect anonymity and decentralization?

Most cryptocurrencies are designed in a decentralized way. This allows users to remain anonymous and keep their personal information to themselves. However, regulators are becoming increasingly dissatisfied with this situation and, although it affects anonymity, most crypto exchanges are forced to introduce stricter KYC measures following pressure from regulators and state authorities. With this in mind, it is important to point out that kyc requirements do not apply to decentralized exchanges (DEX’s). These are all exchanges that organize their business through smart contracts, instead of storing transaction data in a centralized data point. Users of these exchanges trade directly with each other using DEX infrastructure, and for these reasons KYC is still not required to use decentralized exchanges. However, while decentralized exchanges are currently not required to enforce KYC, regulators around the world are constantly changing laws and regulations, and as a result, DEX’s could be forced to enforce KYC in the future.

Source: cointelegraph

What documents are needed for KYC

Exchange users generally have to provide a government-issued identification document (most often an ID card) as proof of identity. Some exchange offices also accept other identification documents such as a driver’s license or passport. In addition to identity verification, the residence address must also be confirmed. You will most often do this with a document confirming the address of the residence (electricity, water bill…).

Source: cointelegraph

Conclusion

“Know Your Client” (KYC) is a set of standards and requirements that investment and financial service providers use to verify the identity of their clients and prevent illegal actions such as money laundering and the like. KYC requires clients to provide a personal identification document confirming their identity and age, and a document confirming the address of residence is required. Slowly but surely this standard is being implemented under mandatory within the cryptocurrency market, but on our Kriptomats you can trade up to 995 euros per day without having to register. We hope that you enjoyed reading today’s blog, and we are interested in your opinion on this procedure, so write about it on our social networks (Twitter, Instagram).
Until next blog.