KYB & Beneficial Ownership Standards for Institutional Clients

Corporate Customer Due Diligence in Digital Asset Firms

 

Know Your Business (KYB) is the process of verifying the identity, ownership structure, and risk profile of corporate and institutional clients. This whitepaper explains how leading crypto exchanges and custodians conduct KYB due diligence - collecting registration documents, mapping ownership structures to identify Ultimate Beneficial Owners (UBOs), and applying enhanced scrutiny to complex offshore structures and shell companies. It covers the regulatory framework driving KYB obligations, including FinCEN's CDD Rule, the EU's 5th and 6th AML Directives, and MiCA's explicit CDD requirements for corporate clients. The whitepaper also addresses the near-total absence of KYB in standard DeFi protocols, emerging permissioned DeFi models such as Aave Arc, and the KYB automation tools - including Trulioo, Sumsub, LexisNexis, and ComplyAdvantage - that exchanges use to manage institutional onboarding at scale.
3_KYB_BENEFICIAL_OWNERSHIP_BORDER
25

Standard UBO ownership threshold requiring identification at 25 per cent ownership share.

3

2 to 5 days, typical KYB processing time for complex institutional clients.

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Key Takeaways

Five key takeaways on how institutional KYB is implemented across centralized exchanges, DeFi, and regulatory frameworks, covering verification requirements, automation tools, enhanced due diligence, and emerging beneficial ownership transparency.