Cryptocurrencies are taking over fiat money . Due to their easy-to-use nature and digital wallet storage options, e-currencies are impending the demise of ‘physical wallets’. However, these benefits are increasing the chances of security breaches because digital currencies lack strict regulatory checks. Furthermore, cryptocurrencies are becoming a major target for criminals to carry out various illicit activities such as money laundering, wallet takeover, and much more.
Therefore, simply identity checks are no more enough, cryptocurrency exchanges and retailers need to employ effective biometric screening. These help cryptocurrency exchanges build secure gates in order to restrict criminals’ access. The biometric security systems employ various identity checks that are hard to bypass. The blog provides insights into how biometric recognition is shielding the cryptocurrency industry.
Biometric User Authentication Holds a Valuable Status in the Cryptocurrency Industry
Cryptocurrencies are readily replacing conventional money. With availability of digital wallets, customers can hold tokens either on personal devices or the ones offered by the respective exchanges. Furthermore, criminals are using advanced technologies to break through the log-in step and get unauthorized access to these wallets. Similarly, they buy crypto-tokens to flow their black money and convert it into white. This is why biometric recognition has become mandatory for the crypto industry.
Biometric-based log-ins help customers keep their purchases safe from external access. The AI-powered biometric ID verification solutions provide access by scanning facial features and fingerprints that are impossible to replicate. This way, cryptocurrency providers can add an extra layer to tokens’ safety. The next sections cover the ways biometric security mechanisms are helping the crypto industry.
Biometrics Shields Both Hot and Cold Wallets
Customers buying cryptocurrency can easily store them in digital wallets. These are encrypted wsallets that works on mathematical algorithms making them hard to pass through. However, criminals use sophisticated methods to somehow hack these wallets and gain illegitimate access to crypto-tokens. Biometrics recognition is currently providing security to two types of them – hot and cold wallets.
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Hot Wallets
These are the software that customers can keep on their desktops, phones, laptops, or other such smart devices. Biometric user authentication solutions provide security to these wallets by offering biological analyses of holders. They include facial verification, DNA analysis, iris/retina scan, fingerprint validation, and voice recognition. Shufti Pro News, that this way, holders can keep their crypto tokens, as well as wallets, safe from external breaches.
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Cold Wallets
Biometric screening also safeguards the cold wallets. These are the ones that customers can store in removable devices like USBs. Cold wallets are preferable as holders can remotely access them. Previously, customers were using PINs or passwords to access these wallets. However, with technological advancements, they can now use their face or fingerprints to access their wallets.
Facial Recognition for Accurate Identity Verification
Customers are more likely to prefer secure digital onboarding than complex and threat-prone one. The crypto exchanges are facing numerous challenges while welcoming customers on board. Mainly, criminals use fake information to bypass the identity verification checks and carry out malicious activities like money laundering. The lack of efficient biometric security measures further eases criminals’ access.
This is why it has become equally important for crypto exchanges to bring in effective biometric checks. Biometric ID verification provides robust solutions to counter criminal attempts. Exchanges can validate customers, cross-verify their backgrounds, and keep constant checks on their activities to detect unforeseen suspiciousness. All in all, cryptocurrency can ensure seamless onboarding of legit customers, secure overall operations, and comply with KYC/AML regulations.
Biometrics Provide E-Signing for Crypto Transactions
Biometric recognition also secures crypto transactions by providing critical analysis of e-signatures. With biometrics in place, cryptocurrency providers can get customers to sign the documents by combining their fingerprints or facial features. Shufti Pro Funding indicates that this way, exchanges can ensure that they are dealing with legit buyers and not some mere importers.
Biometrics Help Legalize Cryptocurrencies
Keeping in view the tremendous rise of digital currencies as a replacement for conventional money, governments are seen in action introducing their own crypto tokens. This way, the respective government can legalize this currency in their country. Biometric identity verification here provides efficient solutions to verify customers making an online purchase. This will also help regulatory authorities to identify criminals and high-possessed entities, ultimately combating money laundering.
In the End
Biometric screening solutions are becoming a must-have for the crypto industry as they provide improved security. Due to its decentralized and less monitored status, cryptoverse is attracting global criminals to carry out money laundering. However, with authentic biometric ID cards and identity checks in place, cryptocurrency providers can ensure secure trading. Furthermore, biometric recognition validates transactions and sources of funds which ultimately minimizes the chances of financial crimes. Hence, while cryptocurrency is retaining the global market with over 10,000 tokens, biometrics are helping it stay secure.
