Simplex, a service that provides fiat on-ramps for crypto exchanges is removing know-your-customer (KYC) restrictions for transactions below $150. The move is part of efforts to increase cryptocurrency adoption by eliminating needless regulatory hurdles for microtransactions.
Since its launch in 2014, Simplex has worked to become a leading fiat on-ramp for the crypto scene, creating channels for several national currencies to be traded for cryptocurrencies. The platform has enabled its clients like exchanges and virtual currency brokers to introduce credit card support, opening the expanding digital currency scene to more would-be adopters.
Simplex Eliminates KYC Burden for Crypto Microtransactions
In a press release shared with Blockonomi, Simplex announced plans to remove KYC restrictions for crypto transactions up to $150. According to the press statement, the fiat gateway infrastructure service plans to effect the updated KYC requirement across all of its clients.
Explaining the reason for updating its KYC policy, an excerpt from the Simplex press release reads:
“Going through KYC is a lengthy process for those users who want to make small first purchases, and Simplex is dedicated to ensuring that all transactions are risk-free as well as fast and easy.”
In recent times, regulators in various jurisdictions have begun to insist on strict compliance with KYC and anti-money laundering (AML) compliance. These measures while necessary to combat the use of cryptocurrencies in illicit financial activities like money laundering, tax evasion, and terrorist financing often come at the expense of platforms and users.
Crypto exchanges, wallets, and custody providers have to bear the increasing cost of compliance while users need to navigate the many levels of security checks before being able to purchase and use digital currencies. These mandatory regulations often pose hurdles to widespread crypto adoption and utilization.
Indeed, the rising cost of compliance occasioned by stricter KYC and AML regulations is seeing small and medium scale cryptocurrency businesses being forced out of business. As previously reported by Blockonomi, crypto exchanges and custodians in the Netherlands are coming under increasing pressure from Dutch regulators.
However, most of the KYC and AML regulations deal with exchanges involved in crypto/fiat trading pairs. The reason being that cryptocurrencies can create an avenue for rogue actors to funnel proceeds from illegal operations and have the crypto market launder these funds in the process.
Fiat Gateways for Crypto Adoption Across the Globe
For Simplex, the removal of the KYC burden for crypto microtransactions is part of the company’s efforts to expand the adoption of cryptocurrencies around the world. According to its press release, Simplex is looking to perfect “the flow of crypto onramp experience for users globally.”
The elimination of KYC for transactions below $150 comes amid the company’s rapidly expanding roster of fiat currency support. Simplex currently offers support for more than 40 national currencies including the Canadian Dollar and Japanese Yen.
By enabling support for more fiat currencies Simplex hopes to create a crypto market ecosystem that allows frictionless fiat-to-crypto transfers. Via its client platforms, users can purchase cryptocurrencies using credit cards.
Apart from supporting more fiat currencies, Simplex is also increasing its crypto catalog with the addition of more tokens. Back in March 2020, the company announced the addition of the Dai stablecoin to its list of supported cryptocurrencies.
Fiat on-ramps simplify the process of people acquiring cryptocurrencies through conventional online payment means such as credit and debit card payments. These channels offer an alternative to peer-to-peer trading services. Platforms like Simplex also ensure adequate security for such transactions with robust fraud chargeback protocols.