KYC

KYC - "Know Your Customer" - is the process of verifying who a customer actually is before letting them transact, and monitoring the relationship afterward. It is the identity layer of financial compliance, and in tokenized investing it is the gate you pass through before you can buy.

A basic KYC check collects and verifies identifying information: legal name, date of birth, address, and a government-issued ID, often with a liveness or document-authenticity check and sometimes proof of address. In the US, KYC grows out of the Customer Identification Program requirements under the Bank Secrecy Act, administered by FinCEN.

KYC is one piece of a broader anti-money-laundering program, and it works alongside other checks: sanctions screening against government watchlists, and - when the customer is a company rather than a person - KYB and identification of the beneficial owner behind the entity.

In a tokenized offering, KYC is not optional friction added for show. It is usually enforced before a wallet is added to the whitelist that is allowed to receive the token. Because the securities are restricted and can only be held by eligible, identified investors, the on-chain transfer controls and the off-chain KYC record are two halves of the same compliance system. KYC confirms identity; it is separate from accreditation, which confirms financial eligibility. Exact requirements vary by platform and jurisdiction.

Source: U.S. SEC (sec.gov) and FinCEN (fincen.gov), as of 2026.