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Know your business (KYB)

Know Your Business or KYB checks are procedures that you can use to verify the details of businesses that you may want to do business with, and to assess potential risks. KYB focuses on understanding the businesses involved in blockchain transactions rather than individual identities, but the details of a KYB check can include KYC checks on the ultimate beneficial owners (UBOs) of the business. Because blockchain technology is decentralized and pseudonymous, KYB checks are extremely important for Web3 companies.

Blockchain KYB checks reduce the risks of fraud, money laundering, and financing of illicit activities. By conducting KYB checks on every business your company does business with, you can uphold regulatory compliance and safeguard your operations from legal risks, and protect your reputation. Good KYB processes foster trust among stakeholders, creating and developing a secure and trustworthy ecosystem.

Blockchain KYB checks involve comprehensive assessments of the entities participating in transactions. These checks include the legitimacy of the business, its ownership structure, its compliance with regulatory frameworks, and its risk profile. Because blockchains are inherently transparent, some parts of KYB are easier, such as tracing transaction histories and assessing the reputations of other parties. However, blockchains are decentralized, so KYB checks require specialized tools and techniques to gather relevant information.

The ComPilot Dashboard has two templates that can be used to build your KYB workflow. They are:

  • Basic KYB verification
  • Extended KYB verification, which checks the proof of residence for the UBOs.

KYB workflows use the ComPilot KYB provider.