Before we start comparing these two blockchain-based KYC check solutions, we first have to know certain things for us to understand the whole situation.
What is KYC check and why is it so important?
Well, KYC check is the standard protocol placed on banks and other financial institutions to collect information about their customers in order to verify their identity. The main objective of KYC check is to prevent banks from being used for illegal and criminal activities such as money laundering and terrorist financing. This is also to help protect the customers from people who may use their identity for illegal means.
What is Blockchain?
According to Don and Alex Topscott, authors of Blockchain Revolution (2016), the blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Its incorruptible nature is very helpful in conducting transparent and secure transactions. In the blockchain, the transactions are only between two anonymous people, each holding unique addresses for them to transact.
What is ICO?
ICO, which is short for Initial Coin Offering, is a somewhat controversial way of crowdfunding with the use of cryptocurrencies. Basically, a company who conducts ICO has a cryptocurrency that will be used inside the ecosystem of their project. The investors will purchase these cryptocurrencies or most commonly called tokens, wherein the revenue will be used to support the company or the project.
Now the more important question, why is KYC check very important for ICOs?
Since most projects introduced by ICOs are fueled by blockchain technology, transactions will be anonymous. The tokens traded in the blockchain have their own values which are independent of a centralized power. The government has no control whatsoever in the transactions occurring in the blockchain because it is out of their control or power.
But the blockchain cannot be ignored further because it is such a big market now with billions of dollars involved. The government cannot stay still and just watch when a very large amount of money is involved because it can cause great devastation if left unchecked. The blockchain can be a medium for activities such as money laundering and terrorist financing which are gravely illegal in all countries. That is why, to prevent such illegal activities to flourish, ICOs must conduct KYC checks in order to know and verify the identity of their investors.
So now we will be comparing two KYC checks solutions: KYC Legal and ICO Pass
What is KYC Legal?
KYC Legal is a blockchain-based solution proposed by the team lead by Daniil Rausov that will allow companies to verify users and prevent fraud.KYC Legal promises to provide:
- Fast and painless verification process for its users, protection of user’s data using protective encryption devices, data hosting for user’s device and control over the data provided by the user and;
- KYC compliant, reliable and secure user information for its service providers and token holders, fraud prevention and also an ecosystem that will allow interaction with other token holders.
- Self- Identification Services will allow users to verify provided data by the use of simple code generation process to confirm his/her identity.
- KYC Legal address the problem of requiring third-party agents to prove a person’s identity by creating a global network of licensed verified agents capable of providing verification on demand in under 30 minutes after you have made the verification request.
What is ICO Pass?
As what can be read in their whitepaper, ICO Pass is a suite of tools for gathering, verification and exchange of KYC or Know-Your-Customer information. Their target audience are tokensale organizers or ICOs, which I think is very important as the governments around the world are starting to question the legality of these ICOs. As their tagline says, ICO Pass provides ICOs with the easiest way to do KYC checks. ICO Pass promises to provide their consumers with fast, secure and efficient KYC check solution. In just a matter of 7 minutes, ICO Pass will be able to verify a person’s ID documents, do face-matching, check Sanction list and the country of origin and place of residence, also with no third-party involved so customers will be able to make sure that their information will not be tampered or altered along the way. ICO Pass aims to provide the cheapest KYC check solution with each check priced at only 7 Euros, which is significantly lower than others. Also, the information collected by ICO Pass can be re-used by other ICOs that the client has participated to avoid waste of time and money on both the ICO organizer’s and the client’s side.
I’ve written a comprehensive review of ICO Pass before, so if you want to learn more about it, you can read it here.
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Verdict
KYC Legal and ICO Pass are both blockchain-based automated KYC solutions that provide fast, transparent and secure KYC checks but for me, ICO Pass has certain advantages over KYC Legal. The speed by which they can process and verify user information is one advantage. While KYC Legal is already fast in doing it at less than 30 minutes, ICO Pass is faster and does it in a matter of 7 minutes only. We know that time is very precious so doing KYC checks faster than others will surely attract consumers. There is also the matter of security wherein in KYC Legal, they pass the responsibility of handling, managing and protecting user information to their clients. ICO Pass handles the security to these pieces of information by using unique encryption devices for each client. And lastly, while each KYC check using KYC Legal solution costs $10 to $50, the same KYC checks cost only 7 Euros or approximate $7 to $8 per check using ICO Pass.
So my verdict for the comparison of these two blockchain-based KYC solutions is ICO Pass is better than KYC Legal.