Building a crypto platform can be exciting: you want to see users onboard and your platform grow and scale across multiple markets. Every signup, deposit, and trade is an opportunity to expand. 

But what happens when your platform becomes a target for fraud?

In 2024 alone, over $14.5 billion was stolen globally through crypto scams, from phishing attacks to fake investment schemes and Ponzi platforms. The nature of crypto makes it especially vulnerable, which is why strong verification measures are essential.

KYC in crypto was introduced as a solution to help platforms prevent fraud and stay compliant with regulations.

 That’s why in this article, I’ll break down everything you need to know about KYC in crypto and guide you on choosing a solution that keeps your platform protected against fraud.

What is KYC in Crypto?

 KYC, or Know Your Customer, is the process of verifying users before they access your crypto platform. In the early days, you could trade and move funds anonymously without strict checks. However, this gave room for fraud and financial crimes, leading regulators to make customer verification a standard requirement for crypto users.

Between 2013 and 2019, global bodies like the FATF introduced guidelines that mandated exchanges and wallets to meet banking-level rules. Due to these requirements, KYC became a core part of compliance and is now essential for anyone managing a crypto platform. 

Why is KYC Important in Crypto?

Here’s a breakdown of the key reasons for implementing KYC on your crypto platform:

1. Preventing fraud and money laundering

Fraudsters look out for exchanges with weak or no checks, and without KYC, yours becomes an easy target. By verifying identities, you stop bad actors from hiding behind fake accounts or using your platform for money laundering. 

2. Building trust with users

Users are more likely to deposit funds and trade actively when they know your platform is safe. A clear KYC process shows them you run a credible exchange and increases your chances of retaining loyal, long-term customers for your crypto exchange.

3. Ensuring regulatory compliance

Regulators like FATF, SEC, and the CBN require KYC as a baseline for crypto businesses. Ignoring these rules doesn’t just risk fines; it could lead to license suspensions or even bans in key markets. Having a solid KYC process keeps you compliant and audit-ready.

4. Supporting growth and partnerships

As you scale, you’ll need to integrate with banks, payment processors, and institutional investors, all of whom expect strict KYC standards. Without it, you risk losing out on key partnerships and access to new markets. A reliable KYC process gives your platform the credibility to grow sustainably and attract the right investors.

Documents Required for KYC in Crypto

To have an effective KYC process, here’s a simple breakdown of the documents you’ll need to request during onboarding:

1. Proof of Identity

Every user must provide a valid, government-issued ID. Depending on the country, this could be:

• National ID card or NIN slip (Nigeria, Ghana, Kenya)
• Voter’s card (commonly accepted where national IDs are limited)
• International passport (especially for foreign users)
• Driver’s license
• BVN (Nigeria) or equivalent banking ID numbers in other countries

2. Proof of Address

You’ll need to confirm where your users live. Commonly accepted documents include:

• Recent utility bills (electricity, water, or internet)
• Bank statements or credit card statements (usually within 3 months)
• Tenancy or lease agreements
• Official letter from an employer, community leader, or local authority

3. Biometric or Selfie Verification

To prevent identity theft or fake accounts, most crypto platforms now require biometric checks. This usually involves:

• A live selfie or short video to confirm liveness
• Face match against the submitted ID
• Additional biometric data where supported (e.g., fingerprint verification tied to national databases)

4. Source of Funds (for higher-value accounts)

When users transact above certain limits, you may be required to trace their source of funds. This could include:

• Payslips or employment letters
• Business registration documents and tax ID for entrepreneurs
• Bank statements showing regular income
• Declarations of the source of funds for large deposits

Step-by-Step Guide: The KYC Process in Crypto Exchanges

Once you know the documents required, the next step is understanding how KYC actually works on your platform. Here’s a typical step-by-step process users go through when signing up:

Step 1: Account Creation

The process begins when a user signs up on your crypto exchange, typically with their email, phone number, and a basic profile. This creates a unique user account that serves as the foundation for identity verification. At this stage, you’re collecting just enough information to initiate the KYC process without overwhelming the user.

Step 2: Identity Information Submission

Next, users are asked to provide more detailed personal data such as their full name, date of birth, and residential address. They’ll also upload a valid government-issued ID. This step ensures you have official documentation to verify the person behind the account.

Step 3: Document & Biometric Checks

This is where verification gets stricter. Automated document verification tools analyze the uploaded ID for authenticity, checking for security features or tampering. At the same time, users are prompted to take a selfie or complete a liveness check, confirming that the person in front of the camera matches the ID submitted.

Step 4: Decision & Approval

Based on the results of these checks, your platform either approves the account automatically or flags it for manual review if something seems suspicious. Once approved, users are granted access to your exchange, usually with transaction or withdrawal limits tied to their verification level.

Step 5: Ongoing Monitoring

KYC doesn’t end once an account is approved. Your platform must continue to monitor user activity, looking out for suspicious transactions, changes in personal information, or expired IDs. High-risk accounts may require enhanced due diligence (EDD) or periodic re-verification. 

In addition to knowing the steps involved, you also need a reliable KYC tool that can automate the process for you. This helps you avoid manual checks and onboard users much faster.

Challenges of Implementing KYC in Crypto

When implementing KYC on your crypto platform, there are several challenges you’re likely to face:

1. User drop-offs during onboarding

KYC can feel like a hurdle for users who want to start trading quickly. Long forms, multiple document uploads, or repeated verification checks can frustrate users and lead them to abandon your platform. High drop-off rates are a common problem for exchanges across Africa.

2. Privacy & data protection concerns

Handling personal information requires strict care and security. Users expect their IDs, addresses, and biometric data to be stored and handled carefully. Mishandling data can erode trust and attract regulatory scrutiny under laws like Nigeria’s NDPR or South Africa’s POPIA.

3. Regulatory fragmentation in Africa

KYC and AML requirements differ across countries, making compliance complex. Rules in Nigeria, Kenya, or South Africa vary significantly, which can make it challenging for platforms operating in multiple markets. Staying up to date with these differences requires constant attention and resources.

4. Rising crypto scams and sophisticated fraud

With crypto scams on the rise across Africa, your platform could be targeted by criminals using fake documents and AI-generated images. Traditional ID checks often aren’t enough to detect these sophisticated attempts. This exposes your exchange to higher risks of financial losses and reputational damage.

5. Operational overhead and scalability

Manual KYC processes demand a lot of time and resources. As your user base grows, managing high volumes of verification checks can overwhelm your team. Without careful planning, this can slow down onboarding and create bottlenecks.

See how Dojah helped ZendWallet cut fraud risks and build user trust in crypto.

Choosing the Right KYC Provider for Your Crypto Exchange

With these challenges in mind, you want a KYC provider that keeps your crypto platform safe. Here’s what to look out for:

1. Speed and User Experience

Your users expect quick onboarding, and delays can drive them away before they even start trading. Your KYC provider should verify identities fast while ensuring checks are thorough. This balance keeps your users engaged and prevents drop-offs that could cost your platform revenue.

2. Coverage & Compliance Updates

Regulations vary across Africa, from Nigeria to Kenya to South Africa, making compliance complex. Your KYC solution should support multiple countries and stay updated on AML/KYC rules. This keeps you audit-ready and reduces compliance risks as you expand.

3. Fraud Detection Capabilities

Fraudsters increasingly use fake IDs, deepfakes, and synthetic identities to bypass verification. A good KYC provider should detect these sophisticated attempts, reducing your exposure to financial losses and reputational damage. Advanced fraud detection gives your platform confidence that your users are real and trustworthy.

4. Scalability

As your user base grows, your KYC process must handle increasing verification volume without slowing down. Your provider should scale with your platform, supporting thousands or tens of thousands of users. This prevents bottlenecks and keeps onboarding smooth, even during rapid growth.

5. Ease of Integration

Your KYC system should work seamlessly with your wallets, payment processors, and internal dashboards. Providers with easy API-driven integration reduce friction for your team. Smooth integration ensures alerts and verification flows happen automatically, saving time and reducing errors.

6. Support and Onboarding

Even the most advanced tool needs guidance to be effective. Your provider should offer responsive support for setup, troubleshooting, and process optimization. Dedicated support helps your team manage KYC efficiently, ensuring users get verified without unnecessary delays.

Simplify KYC in Crypto and Onboard Users Faster with Dojah

KYC in crypto doesn’t have to be challenging or complex. As a founder or compliance lead, you can avoid challenges and onboard users without friction on your platform with the right KYC tool.

That’s where Dojah steps in. Dojah helps you simplify crypto KYC while staying compliant, secure, and scaling efficiently. With Dojah, you can:

• Instantly verify IDs, passports, NINs, and other government-issued documents across multiple African markets.
• Reduce fraud risks with AI-powered document checks, biometric verification, and liveness detection.
• Automate AML screening and make onboarding faster with developer-friendly APIs.
• Integrate seamlessly with your platform and get reliable support whenever you need it.

Ready to simplify KYC and accelerate user onboarding for your platform? Dojah makes it easy to build robust crypto KYC workflows in minutes.

👉 Get started with Dojah today.

Frequently Asked Questions About KYC in Crypto

1. What is the KYC process in crypto?
KYC in crypto involves verifying your users’ identities before they can fully access your platform. This typically includes government-issued IDs, proof of address, and biometric checks to prevent fraud and stay compliant.

2. Can I run KYC checks digitally?
Yes. You can verify IDs, phone numbers, and other documents in real time using digital tools like Dojah, which integrate with local databases across African countries.

3. What are the main KYC challenges for crypto platforms in Africa?
Varying regulations, rising fraud risks, and differences in identity systems across countries make compliance complex.

4. How long does KYC onboarding take?
Digital verification can be instant, but manual checks or incomplete documents may slow onboarding to a few days.

5. Do I need local licensing to onboard users in Africa?
Yes. Each country has its own rules, and staying compliant with local authorities is essential for legal operations and user trust.

6. How can Dojah help with KYC in crypto?
Dojah enables instant ID verification, AI-powered fraud checks, and biometric verification, helping you onboard users quickly, securely, and across multiple African markets.