KYC for Fraud Prevention in Crypto Gambling

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Online casinos ask for some mandatory documents while signing up new customers. These identified proofs are also necessary while withdrawing the winning sum from the concerned casino. The prime reason to comply with KYC is to prevent money laundering. It is an illegitimate procedure to generate fun, intended for terrorist funding, drug trafficking, and other criminal activities that seem to be produced from endorsed methods. The laundering process is carried out to make the resource appear legitimate derived from lawful activities. One of the most prevailing methods of laundering money is internet gambling. Since online gambling is a thriving industry with a huge amount of money, it can become a platform for cybercrime. 

Money laundering 

Launderers fund their             crypto gambling bankroll with this sullied money to make it appear it comes from a legitimate source. Some use the money to fund their leisure activities. Either way, online casinos unwillingly get involved in money laundering. To prevent this kind of activity government has stipulated stringent regulations to curb the modus operandi of criminals who use advanced technology to use loopholes. As the KYC process has become mandatory, all customers are required to furnish the necessary documents at the time of registration. The list consists of ID proof, address proof, and bank statements that exhibit the source of income.

Consequences for non-compliance 

If some discrepancies are noticed, the provider asks for further clarification regarding the source of money. If the player fails to provide a satisfactory explanation, they nullify the account and inform the relevant authority for further steps. In online crypto casinos, those who are reluctant to adhere to KYC compliance are prone to cancellation of the permit and further criminal proceedings.

Verification tool 

The KYC is used to verify the age of the applicant as the legal age for gambling varies from country to country. The permissible age of gambling differs from one US state to other as gambling is a state subject the regulations are formulated by states. The legal age for gambling in most US states is twenty-one, while few states lower it down to eighteen. On the other hand legal age of wagering in the UK is eighteen, applicable to all provinces. Children below the age of eighteen and other vulnerable people are not permitted to indulge in any form of wagering according to the Gambling Act 2005 UK.

Age limit 

IDs issued by the government establish the age of the applicant, and the service provider verifies it with the electoral register to confirm the age and address of the specific customer. However, some crypto online casinos do not ask for KYC documents, and underage people play casino games and take advantage of bonuses. But for withdrawal of the winning sum, they need to furnish the required documents to facilitate payment of payouts.

Preventive step 

KYC compliance is also a preventive process for deceitful activities of individuals and groups when it comes to crypto gambling. The most common fraudulent activity is collusion, where a player opens multiple accounts in line casinos to increase the winning odds. Most of the time, fake or stolen identities are used to create numerous casino accounts. Some cybercriminals use stolen credit cards to fund their bankrolls. To curb these illegal activities, KYC is an important tool.