In today’s crypto landscape, compliance is non-negotiable. Whether you operate a crypto widget on a website, help users list tokens on a platform, or run a B2B exchange, understanding the difference between Know Your Customer (KYC) and Know Your Business (KYB) is critical. While KYC focuses on individual users, KYB goes deeper: verifying businesses and legal entities, ensuring that your business partners are legit.
In this article we’ll explore the key distinctions, the role of KYB in the crypto space, and how strong KYB can be a competitive advantage.
What is KYC?
“KYC” stands for Know Your Customer (or Know Your Client). It’s the process of verifying the identity of individual users/customers, typically collecting: legal name, date of birth, address, national ID, and so on.
For a crypto platform, a KYC check means you validate that a user is who they claim to be, assess their risk (e.g., politically exposed person (PEP) status, sanction list), monitor transactions for suspicious patterns, and thereby reduce the risk of money-laundering, fraud or other illicit behaviour.
KYC is often the first line of defence in the AML (anti-money laundering) framework, especially for platforms enabling fiat on-ramp/off-ramp, trading, wallet services etc.
What is KYB?
KYB = Know Your Business. It’s the process of verifying businesses or corporate entities (and their ownership structure, beneficial owners, registration status, etc.) that you do business with.
From one source: “KYB represents a robust set of procedures crafted to unequivocally verify the legitimacy of businesses.”
In practice for crypto, that means whenever you onboard a business client (for example: a B2B exchange partner, a token-issuer platform, a business deploying a crypto widget for payments), you should run KYB: verify the business registration, UBOs (ultimate beneficial owners), business address, exposure to sanctions, possible shell-company risk.
KYC vs KYB — Key Differences
Here are the main distinctions between KYC and KYB:
- Subject of verification:
- KYC → an individual person
- KYB → a business/legal entity (and the individuals behind it).
- KYC → an individual person
- Documents & data needed:
- KYC typically uses personal ID, proof of address, maybe selfie/biometric
- KYB requires business registration, articles of incorporation, UBO data, ownership structure, possibly certified financials
- Risk assessment focus:
- For KYC: risk the individual user poses (transaction history, geography, identity legitimacy)
- For KYB: risk the business entity poses (industry sector, jurisdictions, shell companies, corporate complexity, UBOs)
- Use case in crypto/fintech:
- KYC is the norm for onboarding retail users.
- KYB becomes crucial when onboarding businesses — e.g., a company that wants to deploy your crypto widget, list their token on your exchange, or become a B2B partner. If you skip KYB, you expose yourself to business-partner risks, regulatory liability, fraud, shell companies.
Why KYB matters for partnerships
If you operate a platform that allows businesses to integrate a crypto widget, or lets businesses list tokens, or run a B2B exchange, here’s why strong KYB is a must:
- Business-partner trust and compliance
When a business deploys your crypto widget, you’re essentially allowing them to process crypto payments (or accept tokens) under your environment. If that business is a shell company, or controlled by illicit actors, your platform could be complicit or face reputational/regulatory risk. - Token-listing risk management
If you let projects “list your token” on your platform (especially in a low-KYC, low-fee environment), you must ensure the issuer is a legitimate business entity with transparent ownership and operations. Without KYB, you may list a token tied to a scam or money-laundering vehicle. - B2B exchange partnerships
In a B2B exchange context, your clients may themselves be businesses (exchanges, liquidity providers, token-issuers, corporate wallets). Conducting KYB helps you validate their business model, ownership, risk exposure, cross-border status, and sanction exposure. - Regulatory/regime demands
Many regulatory frameworks now emphasise not only verifying individual customers (KYC) but also knowing the business customer you deal with (KYB) for AML/CTF (counter-terror financing) compliance. - Competitive advantage & trust signalling
By implementing strong KYB, you can advertise to your market (“we only partner with fully verified–business clients”, “list your token with confidence”) which can improve trust and conversion.
In summary:
- KYC = verifying individual customers.
- KYB = verifying businesses and their ownership/structure.
