The Markets in Crypto Assets Regulation (MiCA) came into force in June 2023. MiCA provides uniform rules for crypto markets, which is important for investors in crypto assets and for the stability and integrity of the crypto ecosystem. ReadID can help crypto-asset service providers to meet MiCA requirements regarding identity verification.
The regulation includes a substantial number of measures that must be developed by payment service providers and crypto-asset service providers before the entry into application of the new regime within the next 18 months.
An important measure for these parties to implement is a reliable verification of the identity of the payer (art. 4). Identity information includes the name of the payer, the payer’s payment account number, the payer’s address including the name of the country, official personal document number and customer identification number, or, alternatively, the payer’s date and place of birth. Please note that this is not only the case for European payers but also for payers outside Europe.
“Given the short implementation period and strict MiCA requirements regarding reliable identity verification, the pressure is high for payment and crypto-asset service providers to come up with a solution that is easy to implement for them, easy to use for their customers, provides unparalleled security and privacy, and meets the best level of assurance to please supervisory bodies”
Reliable identity verification for cryptocurrency
Moreover, the identity of the payer shall be verified in accordance with art. 13 of the Anti-Money Laundering Directive (EU) 2015/849 (AML) and the information obtained pursuant to that verification shall be retained in accordance with art. 40 of that Directive. To be more specific, art 13 comprises a due diligence measure that states that the identity of the payer and its verification should be done on the basis of documents, data or information obtained from a reliable and independent source. According to art. 40, a copy of the documents and information which are used in this context should be retained for a period of five years after the end of the business relationship with the payer.
Given the short implementation period and strict MiCA requirements regarding reliable identity verification, the pressure is high for payment and crypto-asset service providers to come up with a solution that is easy to implement for them, easy to use for their customers, provides unparalleled security and privacy, and meets the best level of assurance to satisfy supervisory bodies. Inverid’s ReadID meets these requirements and can help payment and crypto-asset providers update their identity verification processes and become compliant with the MiCA and AML Directives. Moreover, according to Gartner, reading passport and identity card data with NFC and checking that identity and biometric data against issuing authority sources are likely to become the norm in the not-too-distant future.