BitInstant Adds Risk Controls with Jumio's ID-Scanning Technology

BitInstant, a purchasing platform for Bitcoin, is ramping up security by implementing Jumio Inc.'s Netverify software.

Netverify allows consumers to verify their identities by scanning a driver's license, passport or other form of ID using a computer's webcam.  In February, Jumio launched Netverify Mobile, allowing users to scan ID cards with the cameras built into iPhone or Android handsets. Jumio's technology takes a short video of the ID, rather than a still image, to guard against counterfeits.

"Our goal is to make the Bitcoin purchase process as seamless as possible for our customers and Jumio plays a key role in accelerating that transaction," says Charlie Shrem, BitInstant CEO, in a June 13 press release. "By enabling customers to easily scan and validate their ID with their mobile phone or webcam, we take the friction out of the authentication process while protecting against fraudulent activity."

New York-based BitInstant is adding the extra layer of security to perform know your customer controls.

"Knowing your customer is important for all online businesses but perhaps never more so than in payment transactions," says Daniel Mattes, CEO of Jumio, in the release. "As bitcoins have rapidly increased in popularity, purchase platforms like BitInstant, along with merchants and Bitcoin exchanges they interact with, need the security and confidence that comes from knowing exactly who is on the other end of the transaction."

Bitcoin was considered unregulated in the U.S. until March when the Financial Crimes and Enforcement Network issued guidance on virtual currency that categorizes administrators and exchangers as money services businesses.