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The Need For KYC and Identity Verification For Start-ups- A&D Forensics

The Need For KYC and Identity Verification For Start-ups

The need for start-ups to carry out KYC and identity verification is of high importance. This is because start-ups such as cryptocurrency exchanges or Virtual Asset Service Providers (VASPs) are easily attracted to bad actors. Hence, KYC verification puts bad actors off a VASP.

The Need For KYC and Identity Verification For Start-ups

The Need For KYC and Identity Verifications For Start-ups

In this sense, early implementation of KYC and identity verification will enable start-ups to easily recognize their customers and understand the nature of the business in which their customers are involved. 

KYC and AML Frameworks: Who Needs To Comply With KYC?

Anti-Money Laundering (AML) is a complex framework of strategies, rules, and regulations to combat money laundering, terrorism funding and identity fraud while Know-Your-Customer (KYC) framework only identifies and authenticates the identity of the customer of a financial institution based on their perceived risk profile. 

A startup/financial institution AML policy should comply to it’s domestic AML regulations which usually include these processes

  • KYC procedure: Customer Due Diligence (CDD) and Enhance Due Diligence (EDD).
  • Risk based anti-money laundering policies
  • Ongoing risk assessment and monitoring
  • AML Compliance training for company staff
  • Internal Audits and Controls.

Moreover, this month, a tweet came from the CEO of Binance exchange, Changpeng Zhou, which struck a warning note with the hashtag SAFU (Secret Asset Fund for Users). Saying “the exchange has been able to freeze $450k of the Curve stolen fund, and mentioned that the hackers will be caught for the act”. Hence protecting its exchange from high-risk and staying compliant while having a good KYC/AML framework. 

What is KYC and Identity Verification?

KYC (Know Your Customer or Client) is the mandatory process of verifying the identity of new customers, to verify who they say they are before giving them access to the services they need. 

On the other hand, Identity verification is the process of confirming or refuting that a claimed identity is correct by comparing the credentials with the identity of the real person. This can be done by using customers’ face biometric or ID documents with their verified data set.

Who are Start-ups?

Start-ups as the name implies refers to young companies established by one or two entrepreneurs, whose aim is to create a unique product or service that is irresistible in the market.

What Does Your Start-up Need for Effective KYC and Identity Verification?

An effective KYC and Identity verification protects your start-up from high costs of compliance penalties and reputational damage, as well as the individual customer from getting attacked by any illicit activity.

Therefore, Your start-up needs the following from your clients to carry out an effective KYC and Identity Verification for them:

Identity documents

  • Photo ID document issued by government
  • Driver’s License
  • Passport
  • Voter Identification card 
  • Social Security Number
  • Permanent Account Number (PAN) card 

Proof of Address

  • Utility bill
  • Recent bank statement
  • Rental agreement.

Why Your Start-up Need to Perform KYC on Customers

Your start-up needs to perform KYC and verify customers identity for the following reasons:

1. To improve security and get rid of fraudsters

2. To ensure sound business practices and offer insightful data on customers.

3. To serve as a line of defence against financial crime such as money laundering (ML) and terrorist financing (TL).

4. To protect your business from high costs of compliance penalties and reputational damage.

5. To mitigate the risk of anonymity in the transaction as well as client facing phase.

How Your Start-up Can Prevent Online Identity Theft During KYC-A&D Forensics
How Your Start-up Can Prevent Online Identity Theft During KYC

How Your Start-up Can Prevent Online Identity Theft During KYC

Start-ups should endeavor to use the following tips to prevent online identity theft in KYC:

  • Make sure all payment methods are secure
  • Prevent yourself against chargeback
  • Use best KYC tools to detect fraud 
  • Use a third party document verification software 
  • Reassure customers that your website is safe
  • Use AVS (address verification system) codes.


As start-ups penetrate the African market at large, the need to perform KYC and verify customers identity becomes crucial. Therefore, no matter what the business domain is, every virtual enterprise needs to maintain an effective compliance KYC (Know Your Customer) onboarding process to prevent illicit activity.

A&D Forensics offer Compliance as a Service (CaaS) solution to ensure compliance for start-ups and VASPs. This solution provides an effective KYC tool which assist in minimizing business exposure to risk and also increase customer due diligence. 

Contact us today for further enquiries and solutions.

Contributor: Loveth Odije

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Chioma Onyekelu is a highly skilled and accomplished professional in the field of cryptocurrency and blockchain technology. She is a Certified Cryptocurrency Investigator and Crypto Compliance Specialist, as well as a Blockchain Forensic Specialist and a teacher. She is also a public speaker and her teachings include consultations and practical solutions for African Start-ups on the best and most cost-effective way to build with compliance in mind. With a wealth of knowledge and experience in these cutting-edge technologies, she is well-equipped to navigate the complex landscape of cryptocurrency-related crimes.

In her current role as a Blockchain Forensic Specialist at A&D Forensics, Chioma is responsible for tracing and investigating cryptocurrency-related crimes, as well as training law enforcement agents and compliance officers on the latest developments and best practices in the field. In addition, she is currently pursuing a Master's degree in Blockchain and Digital Currencies at the University of Nicosia in Cyprus, further solidifying her expertise and understanding of the technology.

Chioma's dedication and passion for the field is evident in her work, and she is committed to staying at the forefront of developments in cryptocurrency and blockchain technology to provide the best possible service to her clients. Her exceptional skills in educating and consulting make her a valuable asset to the industry and an authority in the field of Blockchain and Crypto Compliance.


Adedeji is a Forensic Investigation Practitioner and CertifiedBlockchain/Cryptocurrency Forensic
Investigator (CFE, CCI, CCFI & Reactor Certified) with more than Fifteen years of experience across few banks within the Nigeria Financial Sector and educator in Corporate workplace settings, Deji is uniquely qualified and involved in forensics analysis of Financial Infractions, Cryptocurrency crimes and designing plans that works for Government, Regulators, Law enforcement.

He was appointed by SEC Nigeria as Member Virtual Asset and Fintech Regulatory framework drafting Committee, He is a member of Global Digital Finance’s KYC/AML working group in France and a member of the Industry led Thinktank that worked on and came out with FATF cryptocurrency Travel rule InterMessaging Standard for Virtual Assets (IVMS101) to help combat money laundering and terrorism financing using cryptocurrencies around the globe.

His law enforcement training efforts on new money and cybercrime have seen him train many law enforcement agents in various countries i.e Nigeria Police, Nigeria Army CyberWarfare command, Zambia Financial Intelligence Unit, Zambia Central Bank and more.
He is Chainalysis Sole Africa Investigative Partner helping law enforcement investigate criminal organizations using cryptocurrency to conceal illiccit activities across Africa, he is also a training Partner for Blockchain Intelligence Group based out of Canada.

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