KYC is security theater. It's enabled massive property theft while delivering zero ROI to investigators.
Humans are idiots. We make a mistake + double down.
Identity theft now dwarfs all other property theft combined.
Because thieves know right where to find all the data https://t.co/2q12YFcgP4
new effort under way by FATF (financial action task force, an international body) to "regulate" crypto exchanges and remove pseudonymity from transactions by introducing the crypto equivalent of the bank travel rule.
privacy is the new battleground.
RT @josephweinberg: the industry needs to stand together now more than ever globally at this incoming threat. It's time for a call to action. Beyond KYC: Global Regulators Appear Set to Adopt Tough New Rules for Crypto Exchanges https://t.co/kc0Wajkemw via @CoinDesk
They are about to find out what kind of unintended consequences are possible when trying to impose overly-strict regulations on crypto. Mass migration to decentralized on/off ramps and exchanges, which will complicate their law enforcement goals like never before. It would be best for them to be content with how things are now.
Further, the proposed reporting requirements could easily be circumvented, GDF argued. For example, a customer could send funds from an exchange to a non-custodial wallet (where the user controls the private keys). The owner of that wallet could then send the coins to someone at a different exchange, and neither platform would have captured both sides of the transaction. As such, the standard could have the unintended consequence of “encouraging P2P transfers via non-custodial wallets, which are significantly harder for law enforcement to track or control,"
Regulations are always bad, but this is a silver lining.
Beyond KYC: Global Regulators Appear Set to Adopt Tough New Rules for Crypto Exchanges
Marc Hochstein ,Nikhilesh De ,Anna Baydakova ,
May 20, 2019 at 12:00 UTC
Updated May 20, 2019 at 12:03 UTC
The Financial Action Task Force (FATF) is set to finalize new international standards for regulating cryptocurrency firms next month.Those standards are widely expected to subject crypto exchanges, wallet providers and others to the “travel rule” long followed by correspondent banks.Industry representatives say this requirement would be onerous if not unworkable for crypto businesses, and bad for user privacy.FATF “recommendations” aren’t legally binding, but countries that don’t follow them get blackballed in the global economy.