Identity verification in Binary Options
There have been many controversies and confusion among many newcomers to the online binary options trading world about the process of identity verification and the requirements imposed by binary options brokers. Most of the concerns are centered on the possibility of identity theft by unscrupulous brokers. So why do binary options brokers have to ask their clients to provide sensitive information like copies of your passport or driver license, credit card and utility bills?
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First of all, it should be stressed that all licensed and regulated binary options brokers are legally obligated to confirm the identity of clients before any funds can be paid out. This is because of the “Know Your Customer” (KYC) policy that was put in place to prevent money laundering. In fact this requirement is applicable to all financial institutions like banks, forex brokers, pawnshops, online casinos and not just particular to binary options brokers.
List of Documents Required
Normally when trying to verify your identity, the broker will request you to provide a list of documents such as:
Documents that confirms your identity
Normally binary options brokers will request that you submit to them a scanned copy of your driver license or passport. These documents are most widely requested because they include a picture of the owner of these documents as well as being government issued. Nevertheless, any government issued ID cards are also accepted by brokers as proof of your identity.
Documents confirming the client’s address
Another important document that binary options brokers require for verification purposes is a document that can confirm the client’s residence address. This can be any scanned copies of utility bills or bank statement. What is important here is that the document clearly states the address and contains the name of the client as stipulated in his passport or driver license.
Brokers will also require their clients confirm the deposit methods used by them to deposit their funds. If their clients have deposited their funds by credit cards, then they are required to furnish a copy of the credit card used to fund their trading accounts. However, if the deposit method is by way of an e-wallet then a screenshot showing the transaction will be required.
When sending a copy of your credit card, make sure you blank out the first 12 digits of your card number on the front side. On the backside, the 3 digits CVV/CVC code should also be blanked out. This helps to ensure that the credit card information that you sent to the broker cannot be used for any unauthorized transaction.
To get a screenshot of your e-wallet transaction, first press the “PrtSc” key to make a snapshot of your screen. Next, open any text or graphic editor and right click your mouse button to paste the image onto the text or graphic editor. Finally save the file and sent it to the broker.
As we can see from the above, the process of verification is a straight forward process. Normally, this step is required when you want to withdraw your funds for the first time. However, it is also possible that the broker require you to verify your identity immediately after you made your first deposit.
It should be remembered that this verification process is a requirement imposed by the regulators and is not done at the whims and fancy of the broker. And if you feel uncomfortable sending these information to your broker, then you should ask yourself why are you trading with them in the first place?