Know your customer (KYC) is a legally required check in which a company confirms who its customer is and what the business is for. In Iceland, banks, crypto-asset service providers and other obliged entities must carry it out under Act No. 140/2018 on measures against money laundering and terrorist financing. The Icelandic legal term is áreiðanleikakönnun.
What does a KYC check involve?
Under the act, the company must among other things:
- confirm who you are with valid ID
- identify the beneficial ownerBeneficial ownerThe individual who ultimately owns or controls a company, for example through a stake of more than 25%, held directly or through other companies., when the customer is a company
- assess the purpose and nature of the business
- monitor the relationship regularly and keep the information up to date
- verify, where relevant, where the money comes from
The company must also check whether a customer is a politically exposed person. If the check can't be completed, the company is not allowed to do business with that person.
In Iceland, identity is often confirmed with electronic ID (rafræn skilríki). On Myntkaup, for example, you sign up with electronic ID or the Auðkenni app.
Why is it done?
The aim is to make it hard for criminals to use the financial system, including crypto, to hide where money comes from. KYC is part of anti-money launderingAnti-money laundering (AML)Rules and measures meant to stop the financial system, including crypto, from being used for money laundering or terrorist financing..
A good rule of thumb: a legitimate service asks for ID, but never for your private keyPrivate keyA secret number that proves you own the crypto in your wallet. Whoever holds the private key controls the crypto. or your seed phraseSeed phraseA list of 12 or 24 words that backs up every key in your wallet, so whoever has the words can restore the wallet and take the crypto.. If someone asks for those, it is PhishingPhishingA scam where criminals pretend to be a trusted company or authority to get you to hand over passwords, card details or your seed phrase. or another scam.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.