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Identity Verification (IDV) Meaning

Oct 24, 2023 | Updated Oct 24, 2023
Identity Verification (IDV) is the process of confirming the validity and authenticity of an individual’s identity. The process involves validating the individual’s personal details from reliable sources to prevent fraud.

Understanding Identity Verification in Ledger Recover

If a user loses access to their digital assets through any means (they lose hardware wallet, or their wallet is stolen or damaged, etc.), Identity Verification (IDV) helps users recover the private keys for the assets.  

Ledger Recover’s Identity Verification process (IDV or ID Verification) is designed to prevent fraudulent activities and protect accounts against leaks or unauthorized access. Through IDV, Ledger works with experts’ partners who will confirm personal information through tools like the user’s government-issued identification to validate that a user is indeed who they say they are.

Ledger relies on one of its three partners, Tessi, to validate the user’s identity for the backup IDV process when the user sends a restore request. The IDV process here involves two manual verifications conducted by trained agents to ensure the restore request is authentic, and a One Time Security Code bound to the user’s device. The other two partners, Coincover and Onfido, collaboratively check the consistency of the data provided by the user through live video, biometric tests, and ID documents and information. If the output falls below the required threshold, Coincover and Onfido may have to conduct individual manual reviews.

IDV makes it possible to maintain individual autonomy and self-custody when recovering your account. It allows users to completely own and control their digital assets, personal information, and the recovery process. This is opposed to relying on social recovery methods that bring multiple parties into play.

What Does the Identity Verification Process Look Like?

The IDV process verifies users’ details with multiple information sources in addition to their official documents to ensure a high level of certainty regarding the user’s identity. For instance, it requires the user to record a short video of themselves and adhere to the provided instructions. This ensures that there is enough information to verify the user’s identity. The system also uses biometric data to verify consistency between the user’s real-time face and the submitted official documents.

The identification process also involves IDV providers, such as Tessi and Onfido, conducting live checks with the user. In addition, IDV also checks that the biometric data is not simulated or falsified in a video. Multiple checks ensure that the recovery request comes from a legitimate user. Through IDV, an individual’s assets are not compromised if they lose access to their assets.

How is the IDV Process Different from A Full KYC?

The idea behind IDV is to ensure users retain complete autonomy and ownership of their digital assets and identity. Therefore, IDV providers store users’ ID data in encrypted form. 

In the Know Your Customer (KYC) process, users are obliged to provide additional details such as financial information, driver’s licenses, social security numbers, residential addresses (proof of residency), etc. IDV, on the other hand, only requires users to reveal essential details, such as government-issued ID cards, that confirm their identity. This limits the exposure of their personal and sensitive information.

In addition, a typical KYC process runs the user’s identity against well-known databases of politically exposed persons (PEPs) and sanctioned individuals. PEPs and sanctions checks are conducted as part of customer due diligence in regulated industries to decide whether to onboard an individual. Such considerations are not part of a simple IDV process.

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