ransomware kyc aml shuftipro

Hazards of Ransomware are real for Cryptocurrency Miners

 

Cryptocurrency may well be the future of economic landscape and it has the potential of taking the entire FinTech category to a whole new level. But like any technological advancement, few elements and individuals always crawl out of their holes to make some easy buck by defrauding people. Well, unfortunately, cryptocurrency has also find its proverbial pirates. Cryptocurrency miners are now using ransomware to earn money off the people that might be interested in these new age virtual currencies.

The appeal of cryptocurrency is fueled by the unsubstantiated rise in prices of Bitcoin over the few years. This increase in prices, gave rise to a trend where thousands of tech enthusiasts and people looking to earn easy money, lined up to benefit from Bitcoin bubble. Several of them even opted to mine these coins themselves to get even a better chance of earning sure shot profits. Now, this led to many hackers and online bandits to mine potential ransomware to earn even higher amounts. Some even launched their own coins and virtual currency to even avoid detection by authorities or crypto-vigilanties.

What is a Ransomware?

Ransomware works like a common malware but instead of leading to hacked crucial information or documents, the person attacking your personal computer locks down access to important and vital data. Access to that information is gained by the hacker by successful entry of ransomware to your computer. This can be in the form of a file that you clicked upon or a doctored software that you tried to install on your computer. In order to regain access to their files and important documents, users are asked by hackers to pay them specific amount of money, otherwise, their vital data will be deleted or dumped for good. Ironically, ransomware attackers even ask users to pay them in major cryptocurrencies like Bitcoin so that transactions are not traceable by authorities.

A normal user of Personal Computer might not consider itself to be target of such an attack but trust us, when we say that the extent of hazards attached with ransomware are huge. Your personal photographs, your personal chat history, address books and credentials you use to login to your bank accounts from your home computer are all at risk, if you are attacked by a ransomware.

Businesses and employees working in corporate sector are another regular target of ransomware. A simple click on an unsafe link from a workstation, has the potential to risk entire company’s digital databank and servers. In a recent global attack of ransomware, companies were made to pay millions of dollars to safeguard their important files, documents and data from permanent deletion.

Case Studies of Ransomware via Cryptocurrencies

The out of the box concept of using personal computers for virtual currencies mining is real subtle. Hackers have designed some well guised mining programs that specifically target computers that have either an outdated Operating system or that are using non-effective firewall against such brute force. Typically considered to be stowaways, these ransomware are very hard to detect and payments via cryptocurrencies remain largely untracked. Even when detected, it is very hard to remove and you have no other way to pay them off to rid your computer from these malicious bots. Not to mention, there is this huge blow to the performance of your PC due to a large, yet anonymous, workload.

Although, it seems to be a dangerous path for crypto enthusiasts and people interested in ICOs but in actuality, if you do a proper research before buying cryptocurrencies, you will be safe. Don’t forget to check out reviews for an ICO from some leading crypto enthusiasts. Also make sure that you only invest in an ICO that already has placed stringent KYC and AML compliance measures. To avoid being targeted by hackers, make sure that you are using perfectly updated OS on your personal or work computer. A powerful firewall is also a must-have feature on your computer to ward off unwanted access to your computer.

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ICO

ICOs blocking investors from USA and China – Why and How?

Initial Coin Offerings, more commonly known as ICOs, are all the rage in modern day financial world and virtual investment arena. They provide crypto-enthusiasts a chance to invest in virtual tokens from across the globe and afterwards allow the same investors to benefit from higher demand of these coins. But it might come as a surprise to most people that these hugely in-demand ICOs do not allow buyers from China and USA to bid for their coins. There are several reasons that contributed to ICOs shunning potential buyers from world’s 2 largest economies. Why this ban is imposed by ICOs and how they implement this ban is explained below

Why ICOs ban US citizens?

Banning of US citizens from participating in ICOs has to do with outdated financial and investment policies of US authorities. At the core of this ban is the official designation granted by US to ICOs and tokens offered at these offerings. ICO tokens are defined as securities by US authorities which means that only accredited investors can bid in these ICOs. In case, a non-accredited individual participates in these ICOs, US government will not only proceed against that individual but the ICO conducting company will also be dragged into legal proceedings for allowing such a person in buying “securities” in violation of US Laws.
Although, there is a solution around this problem as well by allowing only accredited investors in the ICO process but that limits the investor pool to such small amount that ICOs prefer to ban US citizens altogether.

Why ICOs don’t allow Chinese Citizens?

In the case of China, its not the outdated policies that led to the banning of chinese citizens from ICOs. It was the successive initiatives of Chinese government in late 2017 and early 2018 that led to ICOs blocking Chinese citizens. Through these initiatives, Government of China blocked access for cryptocurrency and ICO related websites to any person residing within mainland China’s borders. The rationale of chinese authorities was that the digital currency industry was mushrooming at an unprecedented rate which was hard to sustain in a longer run and posed serious dangers to Chinese economy.
China is highly centralized economy with chinese government having a strong control on the entire financial landscape. Before the ban was imposed, there was large scale investments being made by local investors and individuals in ICOs. There were regular ICOs being performed that attracted handsome number of participants. Chinese authorities viewed this ICO trend as a pseudo-black market where transactions were being carried out digitally and the peer-to-peer interactions went against the overall structure of chinese economy. Several analysts are of the view that this step of banning the ICOs from mainland China’s borders is temporary and Chinese authorities want to put in place comprehensive regulations before ICOs or participation in ICOs is allowed again.
So the reason to ban Chinese citizens from ICOs is slightly different but the rationale for ICO conducting entities still remain the same. They don’t want to violate the laws of an economic giant such as China and don’t want to be dragged into International litigations. So they simply prefer to block investors and buyers from China to access their ICO proceedings.

How ICOs Block unwanted investors?

Although, ICOs would love to have investors from world’s biggest financial powers but for now they are forced to ban them in order to avoid backlash from their governments. They mainly do that by a technique called Geo-Blocking. According to this method, a company can ban IPs from all the countries that they don’t want to participate.

Country Restrict Feature for ICOs

To streamline the KYC services for ICOs, Shufti Pro has introduced a Country Restrict feature. This will help ICOs to block investors and bidders from any country of the world including US and China. It is a much more efficient and effective system as compared to Geo-tracking as in this case not only IPs of restricted country will be blocked but the AI and Human Intelligence protocols of Shufti Pro will detect and block a person originating from restricted list of countries.

Shufti Pro is a new age technology that uses machine learning algorithm to identify any person and credentials of that person from every country of the world. Processing via Shufti Pro doesn’t take more than 1 minute and worldwide language coverage further enhances the onboarding process for ICOs.

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Crowd Funding

The Importance of Know Your Customer for Crowd Funding and ID Verification Service

In today’s world where most business and financial transactions are taking place online, the importance of knowing who exactly you’re dealing with has become essential. Not only since governments and regulatory authorities have implemented this requirement, but also to safeguard one’s business and financial interests. This is even more important when it comes to crowdfunding where potentially anyone can be an investor or a donor. The importance of knowing the background of who is sending the money and where specifically their money is coming from is of the utmost importance. The role of a ID verification service cannot be stressed enough in this scenario. Although, crowdfunding is not as regulated as other financial areas, steps are already being taken to ensure that it is. Before that happens organisations need to make sure that they are prepared. We will look at the concept of crowdfunding and the reasons behind the increase in regulations.

What is Crowdfunding?

Imagine you have a certain task or idea that you wish to bring in to fruition, there is just one catch you don’t have the money or resources. What would you do? Most people would go to a bank or a finance company to get a loan or maybe borrow from someone if the amount isn’t unreasonable. These days, however, there is another way you can get the funding you need. The way is crowdfunding, also known as crowd-sourcing, to finance your project and that too online. Through it you literally ask people to support your cause, project or idea and people donate, invest or lend you the money. For example, if you need $10k it would be difficult to get that amount from maybe a single individual, but if a thousand people were to give you $10 each then you could reach your financial goal quite easily. That is exactly what crowdfunding allows; the specialized platforms and sites that support it, have thousands of people who would fund you if it piques their interest or if you can offer them something in return.

Crowdfunding in itself is not a new concept. Without going into the history of it; it was done manually before it even reached the world of the Internet. For example in the US, presidential candidates rely on crowdfunding to support their campaigns and have been doing so for many decades. In fact many people relied on and still rely on crowd-sourcing to build hospitals, educational institutions and other projects to benefit humanity. The amazing part is all this was happening way before it became a popular financing method online.

Although there are several types of crowd-sourcing, we will use two examples to elaborate the role of — Know Your Customer, ID verification service and fraud prevention services. The two examples are ICO for cryptocurrencies and donation-based ones that are usually given with no expectation of return.

Risks and Threats Associated with Crowdfunding

There are several drawbacks to unregulated online crowdfunding. The first is the risk of fraud and this happens more often than you think especially during ICOs (Initial Coin/Crypto Offering) that are held by various cryptocurrency providers. In initial coin offerings people fund or purchase tokens or coins as they are more regularly referred to. If there isn’t a fraud prevention service such as Shufti Pro integrated then the purchasers that have used a credit card or debit card can later cry wolf and say that they never carried out the transaction. This results in charge backs and loss for the cryptocurrency provider.

The second threat is money laundering. People have been using crowdsourcing platforms to

launder money. This is due to the lack of proper Know Your Customer processes and id verification service. They often get away with this crime and when they do get caught by other means, all the venues they used to launder money including the crowdfunding platform is brought under investigation. To put in to perspective the severity of this threat, imagine what would happen if it was ever found out that the presidential campaign of the current US president was funded by laundered money. What would happen to the reputation of that president and the overall trust that people have in him? Luckily campaign funders are required to go through a KYC process that includes comprehensive background checks.

The third threat which is most critical in the post 9/11 era is that crowdsourcing platforms can be made a basis for finance terrorism and without proper ID verification service these financiers can be hard to identify and catch.

ID Verification Service and Fraud Prevention Service to the Rescue

Realising these hard facts, platforms that provide crowdsourcing service and cryptocurrency providers that carry out ICOs have turned to specialist companies for ID verification service and fraud prevention services. These companies have the software, hardware and expertise to provide real time as well as offline verification of an individual’s identity. They also offer proof of purchase in the form of recorded verification videos that can be accessed by crowdfunding platforms or ICO providers. Hence, any potential charge-backs can be deterred and/or disputed. In a worst case scenario the complete verified information of the individual is there so that they can be traced if required. These service providers also counter identity thefts and usually have databases that are ultra secure. So platforms and website owners can have peace of mind that their customer’s data is in safe hands.

Selecting an ID Verification Service

Having mentioned the value of verification service it must be said that not all companies offering fraud prevention services are the same. Companies understand that customers usually do not like waiting on or going through long KYC processes. That is why it is important that these platforms take on a company that gets the verifications done in minimum time and that too in seconds.

Most verification companies boast about implementing machine learning and advanced AI systems to catch documentation fraud, identity theft, real-time liveness verification, etc. But the better ones go the extra mile and offer a hybrid solution that includes a backup of human intelligence on top of the AI. This adds a time tested human touch to reverify the entire process and all this is done in seconds as well.

Also, given all the attention about user data privacy there are a lot of new regulations that are being launched. In order to avoid any fines or issues because of these new laws it is important that crowdfunding sites thoroughly check the ID verification service provider. They should be up to the mark with regard to compliance with all such rules and regulations.

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