Customer Due Diligence (CDD) is the process used by businesses to verify the identity of their customers and assess potential risks. In cryptocurrency, this involves a thorough examination of a user’s background to prevent fraud, money laundering, and other illicit activities.The CDD process typically includes collecting personal information such as names, addresses, and identification documents. Businesses may also assess the customer’s transaction history and identify the nature of their activities to ensure compliance with regulations. By implementing effective CDD measures, companies can better understand their customers and detect suspicious behavior. This not only helps reduce risks but also builds trust and integrity within the market, essential for fostering a secure environment for all participants. Overall, CDD plays a crucial role in maintaining compliance with regulations while safeguarding the financial system against misuse.