Online casinos are always willing to adapt to the latest technologies, and adding cryptocurrencies as a payment method was the next logical step to take. Blockchain and Cryptocurrency are some of the biggest buzzwords heard daily. There are about 10 million Bitcoin holders worldwide.
Crypto makes for much safer, more secure transactions. The added layer of protection can reduce the risk of hacking, fraud, and double transactions. One of the main reasons for slow crypto integration is the slow transaction speeds and lack of standardisation. Cryptocurrencies are susceptible to security breaches if your private key is not stored away safely.
KYC requirements were introduced to curb money laundering and fraud. The fear around crypto and KYC is that some crypto sites do not require account holders to verify their identity or address the way financial institutions usually do. Otherwise, this would make identity theft and money laundering easier as the customer’s profile will not be visible.
Decentralised systems are designed to allow customers to keep their identities concealed from the central authorities. Meaning transactions made and are not traceable. KYC requirements do not apply to DEXs, as their users trade directly with each other. Enforcing KYC could help to crack down on ransomware attacks. In 2020 victims paid almost $350 million in crypto to anonymous hackers.
The Complexity of Crypto Purchases for Players
There are two types of crypto wallets, namely, hardware and software wallets. A hardware wallet looks similar to any USB that can be connected to a computer. A private key is used to access the wallet. On the other hand, the virtual software wallet has similar functionalities to a typical e-wallet.
Most of the older generation are not tech-savvy and have already had to adjust to using e-wallets as a primary source for online gambling. They are accustomed to entering their card information to deposit or withdraw their money.
Whereas, now they would have to be educated on how to use a new type of wallet that sends funds via wallet addresses and/or account destination tags, which could be very intimidating for them. Introducing cryptocurrencies will be challenging as they might be stuck in their old ways of doing things.
The Volatility of Crypto Prices
Bitcoin is highly volatile, its price is constantly fluctuating throughout the day and had previously peaked at $20,000 by the end of 2017. Because Bitcoin is a work in progress, the network is constantly going through changes. As it grows, the features and usages grow and change, eventually leading to scalability issues.
Large volatility can also be seen in other cryptocurrencies such as dogecoin, Cardano, Binance Coin, Ether and Solana. These falls give less confidence to those considering using this form of a transactional method when gambling.
Lack of Trust in Crypto-Only Brands
The increased use of cryptocurrencies for online gambling means that the exchange sites are getting new customers, and some become sitting ducks for cybercriminals. These transactions are linked to wallets and not individuals. The anonymity of crypto may lead to customers not trusting the site as transactions are not traceable.
Many people aren’t fully aware of how crypto works which tends to stir up fear of the unknown. Someone who does not have a basic knowledge of how crypto works could easily fall victim to scams. Some people might not understand the risk of storing digital assets and keeping track of their keys. This fear then spirals to people not knowing how to receive their winnings or losing out on their winnings.
Solutions to This Problem
Players want to feel secure when gambling in online casinos, and KYC helps to provide that assurance. Enforcing Know Your Customer (KYC) compliance could assist with curbing money laundering and malicious attacks. KYC protocols are designed specifically to avert fraudsters from creating fake accounts.
KYC models have since become compulsory for online casinos, and they weed out fraudulent accounts. Pass base is an ID verification startup that offers tools where users can upload selfies of themselves and their ID to speed up the verification process. Burrata issues digital identity tokens to attach to cryptocurrency wallets.
Offering No Wagering Bonuses for Crypto Payments
Sign-up bonuses are one method of attracting new players. New players/accounts are given free bitcoin upon signing up without a wager. Some Deps operators offer no wagering requirements and larger incentives for users who choose crypto as a form of payment.
Bitcoin faucets are another way to earn bonuses. These apps or websites help you earn rewards for completing tasks in the form of satoshi. The tasks could be as simple as watching an advert, signing up or taking a short survey. Players can also receive bonuses by referring friends to sign up for daily login.
At first, gambling with crypto can seem a bit daunting, and you find yourself questioning its safety. One of the main benefits of gambling with crypto is you can do it anywhere in the world. So long as you have an internet connection and a digital wallet, you can gamble on your favourite site or apps.
Once you have made deposits and earned bonuses, it is effortless to make withdrawals. There are legit ways to withdraw your earnings; however, you need to connect your wallet to the casino. Most importantly, you must ensure your KYC is verified; if not, you will be prompted to send your missing documentation before any withdrawals can be made.
All you need to do is copy the deposit address from your wallet and enter it on the casino’s withdrawals page. Click validate and wait for the funds to roll in.
Integrating Crypto-Processing Providers
A KYC-compliant gambling operator must ensure that the player’s identification is verified. Players must submit their proof of identification which can be ID documentation and proof of valid physical address. The player’s age should also be verified, and the player should be of legal gambling age.
The verification process comes down to these few steps; Identity verification, Proof of address and Source of funds (confirmation that funds were legally obtained). Online casinos should also cross-check the player’s profile to confirm if they are on any self-exclusion (GamStop) lists. Once all of the KYC protocols are in place, it monitors transactions and makes it easy to find fraudulent transactions. Adhering to the KYC verification can also play a role in withdrawing your winnings. If a player has not been verified, this could negatively impact the withdrawal process.
You will be requested to download KYC documents if you would like to make a withdrawal. At this point, you will be notified if there are any issues with your verification. It is always best to confirm this before depositing to avoid hassles and avoid not receiving your winnings. It is in the online casino’s best interest to verify a player’s identification to avoid a person claiming casino bonuses multiple times.
There are a few simple ways of depositing crypto into your casino wallet. You must navigate the deposits page and select the Bitcoin option. You will then be given instructions on how to complete the transaction. The transaction should be fully processed in a few minutes. Another way is by depositing funds into your casino wallet, and the casino then purchases crypto, which is available in a matter of minutes.
The rise and fall of Bitcoin and the blooming of new coins such as Ethereum have taken the globe by storm. Some people fully embrace the currency, while others remain sceptical and completely oblivious to it. Gambling/Betting has been around for centuries, and the market continues to grow. Online gambling is constantly growing and adapting through the ages and with new technologies.
It was only inevitable for online casinos to add crypto as a form of payment. These virtual currencies offer a sense of anonymity which some players prefer, and also low costs on transaction fees. Due to how virtual wallets work, transaction processing times are much faster. Like most good things, criminals always seem to find new creative ways of stealing.
Hence the inclusion of KYC protocols is used to combat fraud and deter cyber criminals from creating fake accounts, hacking accounts and money laundering. KYC aims to give crypto users a sense of safety when performing online transactions. Gambling operators must also check players’ profiles to make sure they are of legal age and not on self-exclusion lists.
An online casino’s credibility is all it has, so it should protect itself by sticking to the KYC standards. Crypto has a long way to go due to the market volatility, the constant up and down and people who don’t see it as a thing of value because it cannot be touched. Cryptocurrency is on its way to becoming the future of transacting.