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16th May 2022


Since the Reserve Bank of India lifted the prohibition on cryptocurrency in 2020, it has experienced a meteoric surge in India. In the short months after the ruling, India has emerged as a burgeoning hotspot of decentralized finance. In 2021 alone, 20 million consumers entered the crypto industry. To offer an example, crypto investments surged from $923 million in April 2020 to $6.6 billion in May 2021. The majority of the increase may be traced to the rising interest of the young, particularly those aged 18 to 35.


The embryonic cryptocurrency economy in India is gradually becoming a target for sophisticated cybercrime. The fundamental reason for this is that cryptocurrency transactions without KYC are difficult to track. Furthermore, crypto scams can lead to other types of cybercrime, such as identity theft or ransomware assaults. As India's crypto sector matures and solidifies, it is critical to creating an environment that supports a rigorous KYC. The Reserve Bank of India requires regulated enterprises to follow KYC/AML/CFT regulations, which is becoming increasingly important as bitcoin volumes rise.


While banks and financial organizations are required to have a KYC procedure in place, these laws do not apply to decentralized exchanges (DEXs), wallets, or protocols. This implies that cryptocurrency dealers are not obligated to reveal their identities. Most DEXs just provide the infrastructure for P2P transactions and may be unable to track possibly fraudulent P2P transactions.


However, with the exponential growth of cryptocurrency, there is an urgent need to use tools that can assist crypto agencies in using a thorough KYC process. These exchanges may conduct various checks and collect valid background information from national databases using a single KYC API. Many cryptocurrency exchanges have implemented stringent KYC policies and are combating fraud by employing a single KYC integration for various data sources.


Source: DQ India

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