Social Trading Platform implements KYC mandatory policy to keep the platform transparent and keep users safe
“The seamless integration and easy use for our customers, without any wait times or hassle, that’s the biggest advantage of using Authenteq. It’s a futurist and modern approach to identity verification,”
Serdar Bisi, founder of Tycoon
INTRODUCTION
Tycoon is a fully automated social cryptocurrency trading platform. Inspired by copy trading done on traditional markets, Tycoon wanted to replicate the framework but in a more safe, secure and transparent way. By integrating Authenteq’s identity verification into their onboarding, they implemented a KYC mandatory policy to prevent fraudulent activities from ever getting on the platform.
CHALLENGES
● Cryptocurrencies, and particularly altcoins, are often traded on specific platforms requiring people to set up and maintain dozens of accounts in multiple languages.
● Traditional trading platforms don’t limit the amount of accounts any single person can create which leads to burnt accounts and removes any true historical account of a trader’s activity.
● The tools and knowledge sharing offered in the traditional financial markets weren’t available to those looking to invest in and trade crypto.
Serdar Bisi, the founder of Tycoon, had long since developed an appreciation of and talent for trading. Bisi taught himself how to watch the market, how to make profitable trades, and which strategies to employ or avoid. But he also started noticing larger trends, including the effect that the news cycle had on the market. This led him to begin gathering new events, matching them to the market’s reaction, and building his own sentiment analysis.
“I learned that the market, most of the time, acts contrary to the publicly available news,” says Bisi. “Then in early 2017, I started to explore the cryptocurrency space, the technology behind it and where these assets were coming from. I immediately loved the fact that it was giving power to something which was not there before: peer to peer asset trading and transactions with no need for a third party.”
The sentiment shifts around Bitcoin were particularly interesting to Bisi. With its volatility and huge swings, he realized that the sentiment shifts and timeframe of people investing in cryptocurrencies was much different. People weren’t looking back more than six months to try to build robust analysis, people were driven by their emotions and missing the big picture. As new cryptocurrencies kept being created, and remained as volatile as ever, Bisi saw the crypto space as the market 2.0. Where the traditional stock market was the wise older grandfather figure, the crypto space felt like the teenage grandson, taking the space to new levels.
“There was a new altcoin in 2017 during the hype, which had a strong probability to go up in value, but it was only available on an Asian exchange,” says Bisi. “You’d have to go to a site, in a language you couldn’t read, and try to make an account. This happened all the time. You needed so many accounts it became a 24/7 job, and most people had full time jobs they were also trying to manage. A lot of people investing in crypto at that time didn’t have trading experience or know much about investing or asset management. They were looking for help.”
Tycoon at this time was simply a private and free Telegram group, a place to share news about cryptocurrencies and trading, with 300 members. The knowledge sharing, and steady growth in the public’s interest in crypto led to his a-ha moment. People were looking for information about crypto trading, they were looking for leaders in the space, but the framework just wasn’t there. What if a crypto exchange platform could provide copy trading?
Copy trading is common in hedge funds and has been practiced for decades, but it has typically been reserved for institutional investors and not made available to the average consumer with a smaller amount to invest. What it allows people to do is access a list of traders, see their average returns, and copy the trades of that investor fully automatically. A new trader can replicate the portfolio of a seasoned trader.
“We knew we wanted to take the same approach as copy trading, which was not new at all, but modernize the approach behind it,” says Bisi. “We didn’t want anyone to be tied to one, or multiple platforms, we wanted the trader to trade on their preferred exchange.”
SOLUTION
● A KYC mandatory policy seamlessly integrated into their onboarding process to ensure one identity can only be registered once.
● A fully automated identity verification system to ensure that users can use the platform 24/7 with no lag times or manual intervention needed.
● The ability to internally identify if someone who is already registered before they are able to complete the registration process to ensure the highest level of compliance and security from the beginning.
● A transparent account of a trader’s full trading history to empower them with all the information they need to feel confident when choosing which traders to follow.
PARTNERSHIP WITH AUTHENTEQ
Security and compliance are the most important pieces to Tycoon. One thing they knew they wanted to avoid entirely was the possibility of anyone, particularly a trader, to create multiple accounts. Trading platforms on the traditional market allow people to create as many accounts as they please. That means if a trader incurs huge losses, they can burn that account and start fresh, leaving the bad trade behind. For Tycoon, it’s not about avoiding losses – that is an unavoidable part of trading – but being transparent. A KYC mandatory policy would not only help them stay compliant but also prevent fraudulent activities from taking place.
“We decided to have a mandatory KYC policy and to always have a one account policy for the trader,” says Bisi. “This means that even if you have a bad month as a trader, we know you’ll come back from it. It will always be visible in your account, but you are always able to gain it back. It’s important for us to show our users an accurate and historical account of a trader’s activity. They aren’t only showing you what they want you to see.”
The system is also fully automated which means that as soon as a trader makes a change to their portfolio, the copy trader’s account is updated to reflect that. You can cancel, unfollow a trader or withdraw money at any time as it is never leaving your exchange account, but as long as a trader is being followed, no further action is required by the user. The user’s portfolio will always reflect the portfolio of the trader. Tycoon acts as the communicator between the trader and user.
“We love that Authenteq is fully automated, that it’s 24/7 and that it doesn’t require a human being to sit in an office all day.”
WHAT’S NEXT
By implementing Authenteq’s KYC and identity verification, Tycoon can focus on the future of the company, building out the technology and growing their user base with full confidence. Tycoon has successfully implemented Binance as the first exchange on the platform, but they plan to remain platform agnostic and offer integration with all the major exchanges.
Bisi says that all of fintech, all of crypto trading, and all of asset management relies on KYC to some degree. It’s whether or not the companies themselves have a safe and compliant approach is what remains unclear. What he does know is that the days of manual intervention, whether it’s for a loan application or opening up a bank account, should be behind us.
“We want to make trading crypto simpler, make it cleaner and make it more secure, that’s what Tycoon stands for,” says Bisi. “And this is also what Authenteq is trying to achieve with their solution. We’re a good fit because we have the same big goal of making life easier and faster and more convenient for the user. It’s a futuristic and modern approach to identity verification, and we are really excited for the future.”
