As a matter of fact, from 2020 to 2021, the crypto sector outperformed forecasts for the next five years. More people are buying cryptocurrency, which has led to an increase in the number of cryptocurrencies on the market.
Isn’t it wonderful? Even though cryptocurrency and blockchain have proven beneficial financial options for many, there are still drawbacks to be aware of when getting involved. Scammers are entering the business at an alarming rate to defraud unsuspecting customers. In addition, their abilities advance along with the market.
As to why crypto is so popular, you may wonder. Companies that perform crypto audits and know your customer (KYC) checks can help. Follow us as we delve deeper into the mechanics of virtual currency adoption.
Cryptocurrency audit and KYC firms.
Blockchain security firms that provide smart contracts and crypto project auditing have recently grown in popularity. They are a massive step in the right direction for building trust in the crypto business. Fraudsters may benefit from any flaws in smart contracts, notwithstanding how much they have improved crypto.Of course, newcomers to the market should exercise caution.
You can see for yourself how many projects came up and ended up causing a lot of inconvenience for users.
Smart contract audit is an excellent way to secure the safety of your funds, regardless of where you are. In theory, this could be one of the reasons you’re better prepared for the crypto sector than others. As a result of the industry’s digital nature, many hackers and individuals who wished to defraud others were involved. Fraudsters are invading the industry at an ever-increasing rate, hoping to dupe naive consumers. That is where the investors must also be careful.
An Overview of the Auditing Process
Auditors have honed their abilities to detect problems within a project or its team. Well-known blockchain security startups like SolidProof, Sentinel, and Quant-stamp, which form alliances with prominent crypto firms, are good examples. They, along with a growing number of others, are working to restore investor confidence in crypto projects while also safeguarding their financial interests.
How? They meticulously inspect the project’s components to identify potential problems that could end up costing the businesses money. Communication with the projects is essential to provide the best possible service. The firms provide blockchain projects with both intelligent contract and KYC proofs using a combination of manual and automated assessments.
For starters, you can get in touch with the company and request a thorough examination of your project’s source code. You may rest assured that all of your questions and concerns will be answered during the entire process. Vulnerability risks are often classified as high/critical, medium, and low in an audit report provided by the firm.
When a project has been thoroughly cleaned, they issue a certificate to confirm it. Depending on the vulnerabilities discovered, they will next recommend the best course of action for resolving the situation. Close an audit with a full report once they’ve filled all the gaps.
The process of verifying a person’s identity is known as KY.
In most cases, KYC verifications and Anti-Money Laundering rules go hand-in-hand, preventing nefarious individuals from using the platform. As is the case with most crypto exchanges nowadays, you must first show proof of identification. Users’ personal information is kept private on the systems of companies that provide KYC verification services, and only those companies’ personnel have access to it.
If users are suspected of money laundering or terrorist financing, they need to determine if they pose any risk to others. In addition, they need to verify where your money comes from and your legality.