6 ms·

KYC is unavoidable for financial products.

by flixic 6y ago

mbesto 6y ago
No shit. That's not the point. The point is that the world's largest privacy abuser can now directly tie all of your online habits to your government issued ID. The implications here are staggering.
- weego 6y ago
  If they're regulated in the sense they're suggesting then no they can't
- s3r3nity 6y ago
  This isn't a vote of support for FB, but I've said it before and it bears repeating: you are naive if you think you _can't_ do this today. There are companies doing this pretty well (ex: DMP's, or "data management platforms.")
  - mbesto 6y ago
    Agreed, but DMPs aren't perfect, they aren't considered source of truth, and are used largely for targeting for advertising. However in this case there can be serious implications outside of simply advertising and the data integrity issues with DMPs now begins to lessen.
  - est31 6y ago
    To add to this, with the argument of fighting terrorism, since a while Governments around the world have been requiring phone numbers to be only given to people who identify themselves by their government issued ID. And guess what Facebook etc. are requiring at login. Phone numbers. For security they claim, yet they send spam messages to the number.
  - basch 6y ago
    If you are giving them your PII to verify your identity, doesn't that means they already have a PII database to compare you against? Id be pretty shocked if anybody here had a FB account, under a pseudonym, and they actually believed they were keeping their true identity hidden from FB. If you have an account, they know who you are. Verifying your ID is a due diligence on their part to CYA. How many people, saying they would never give info over to FB, willingly hand it over to the fintechs like Robinhood?
- _eht 6y ago
  They are already collecting GID if you use FB for anything more than creeping these days.
- freedomben 6y ago
  > No shit. I think you could have gotten your point across without the rudeness. Talking to people like that creates a toxic environment. I fully agree that there is no way I'm giving that info to FB. I noped out of running ads with them because they wanted my ID. My privacy is invaded enough by them, no thanks.
  - sinatra 6y ago
    > I think you could have gotten your point across without the rudeness. Talking to people like that creates a toxic environment. Thank you for calling this out. To some, this may seem like over-reaction, but only by calling even minimally rude statements out can we ensure that HN doesn't become Reddit.
    - mbesto 6y ago
      FWIW - GP here, it wasn't intended to be rude, but more of an agreement that KYC exists but is totally besides the point. I'm sorry if it came off any other way than that.
      - sinatra 6y ago
        Yes, I thought so (that you didn’t intend for it to be rude).
- kerng 6y ago
  With more then 99% confidence, FB, Google and Amazon, Visa, Mastercard can all do this today already.
milankragujevic 6y ago
Yes, but not US-based KYC for non-US based persons, i.e. in the EU. My country (Serbia) that's not in the EU had quite a bit of drama due to sending personally identifiable private citizen data (i.e. first and last name, specific personal info, ID card number, unique personal identifier) over Cloudflare which does not currently have a legal representative according to the Serbian Data Protection Regulation, which makes it illegal for the government or any other data processor to send ANYTHING to Cloudflare because Serbia is not in the EU and even though GDPR and ZZPL (our version) are literally identical (to prepare for EU-integrations), GDPR only applies to citizens of countries that are right now in the EU. So, I don't think some people or [all] governments will like this. At all. edit: And yes, SHARE Foundation did sue Google, Facebook, and all other tech giants (including infrastructure providers) in Serbia for ZZPL but apparently only Google appointed a legal representative in Belgrade, and even that seems like a "PR stunt", given how weakly GDPR is being enforced, and it is backed by the whole of EU. No other company replied or appeared in court.
grishka 6y ago
I'm still having a hard time figuring out how this whole Facebook as a gatekeeper thing fits into the anonymous privacy-first blockchain project that is Libra. As I see it, it's either centralized with a KYC check when you sign up, OR it's decentralized with anyone being able to generate a key pair and be a part of the system. So which one of those is Libra, after all?
- wmf 6y ago
  Didn't they drop the anonymous privacy-first part a month ago? https://davidgerard.co.uk/blockchain/2020/04/16/facebooks-libra-national-currency-tokens-a-new-white-paper-what-this-means/ https://davidgerard.co.uk/blockchain/2020/04/16/facebooks-li...
  - grishka 6y ago
    Oh. So at this point the blockchain part is only kept to be able to brag about it being a blockchain. Otherwise it's your ordinary payment system, complete with all the annoyances and limitations that come with it being that.
    - espadrine 6y ago
      Facebook doesn’t want Libra to be a Facebook project, because of the negative connotations associated with the Facebook brand. So the main goal of the blockchain part is to have friends (the Libra association) between which the responsibility is shared. It dilutes concerns and deflects issues: the headlines won’t be “Facebook faces regulatory sanctions” but “The Libra association (Facebook, Uber, Spotify, …) faces regulatory sanctions”. Or at least that was their hope initially. The press, or the regulator, may have pushed scrutiny on Mastercard had they stayed involved, but I doubt they will assume that Spotify is responsible if something wrong happens in the Libra association. But fundamentally, the creation of consensus on transactional history merely elects a leader, and other companies’ servers only record the leader’s blockchain. Additionally, the assets backing the payment system are the real meat behind enabling this technology. And unlike traditional banking, Facebook & cie maintain control over those assets regardless of which company handles the Libra account. Banks can handle your payments because they have ownership of your deposits, but funds do leave the bank when performing a transfer (ACH, SWIFT, etc.) to another bank. In Libra, the assets remain controlled by the Libra association even when making a transfer from one Libra app to another, eg. from Novi to Spotify.
Sargos 6y ago
It kind of depends on what financial products you are talking about right? You can, today, do high margin longs and shorts (dYdX), collatoralized loans (Maker, Compound), buy and sell derivatives (Synthetix), and buy into funds run by fund managers (Set Protocol) without any KYC. Even as an American, though these services will be more important to South Americans, Africans, and Southeast Asians. KYC will still be used by old firms in rich countries, but it's not a given for the future of finance and most people will likely opt out as it's more trouble than it's worth and exposes you to identity theft when one of those firms is hacked and your personal data is stolen by criminals. It's just easier, faster, and safer to not use KYC.
- InTheArena 6y ago
  This statement is not correct. Southeast Asia and South America are highly focused on KYC, and while in the past, you could opt out, increasingly opting out is not a option. If anything, they are going in the other direction. I can't speak to Africa, but I can tell you that India, China, Vietnam, Thailand do not treat KYC as "optional" and are planning on only tightening restrictions past what the US and EU require. Source - work with Asian and American banks on KYC.
  - Sargos 6y ago
    Well, yeah. That's my point. People in those countries not only have to deal with the friction of KYC when even identity documents can be a problem sometimes but they also have to deal with corrupt banking systems and governments where their money and information might not even be safe to give out. These people always have the option of using the services I listed. Anyone can. They are free and unstoppable for anyone who needs them regardless of nationality, race, status, etc.
mmm_grayons 6y ago
Right, so maybe we should be telling the government to stop requiring financial institutions to require identification.
chrisco255 6y ago
Not the decentralized, blockchain-based ones.
- rodonn 6y ago
  Even for decentralized ones, there are legal requirements for any entity that wants to let you buy or sell. Anyone who buys or sells bitcoin from you without doing KYC is breaking US law.
  - chrisco255 6y ago
    No, because Bitcoin is a commodity, it's not legally classified as money. There's no need to do KYC for BTC any more than there is for baseball cards.

KYC is unavoidable for financial products.

by flixic 6y ago

KYC is unavoidable for financial products.

No shit. That's not the point. The point is that the world's largest privacy abuser can now directly tie all of your online habits to your government issued ID. The implications here are staggering.

weego 6y ago
If they're regulated in the sense they're suggesting then no they can't
s3r3nity 6y ago
This isn't a vote of support for FB, but I've said it before and it bears repeating: you are naive if you think you _can't_ do this today. There are companies doing this pretty well (ex: DMP's, or "data management platforms.")
- mbesto 6y ago
  Agreed, but DMPs aren't perfect, they aren't considered source of truth, and are used largely for targeting for advertising. However in this case there can be serious implications outside of simply advertising and the data integrity issues with DMPs now begins to lessen.
- est31 6y ago
  To add to this, with the argument of fighting terrorism, since a while Governments around the world have been requiring phone numbers to be only given to people who identify themselves by their government issued ID. And guess what Facebook etc. are requiring at login. Phone numbers. For security they claim, yet they send spam messages to the number.
- basch 6y ago
  If you are giving them your PII to verify your identity, doesn't that means they already have a PII database to compare you against? Id be pretty shocked if anybody here had a FB account, under a pseudonym, and they actually believed they were keeping their true identity hidden from FB. If you have an account, they know who you are. Verifying your ID is a due diligence on their part to CYA. How many people, saying they would never give info over to FB, willingly hand it over to the fintechs like Robinhood?
_eht 6y ago
They are already collecting GID if you use FB for anything more than creeping these days.
freedomben 6y ago
> No shit. I think you could have gotten your point across without the rudeness. Talking to people like that creates a toxic environment. I fully agree that there is no way I'm giving that info to FB. I noped out of running ads with them because they wanted my ID. My privacy is invaded enough by them, no thanks.
- sinatra 6y ago
  > I think you could have gotten your point across without the rudeness. Talking to people like that creates a toxic environment. Thank you for calling this out. To some, this may seem like over-reaction, but only by calling even minimally rude statements out can we ensure that HN doesn't become Reddit.
  - mbesto 6y ago
    FWIW - GP here, it wasn't intended to be rude, but more of an agreement that KYC exists but is totally besides the point. I'm sorry if it came off any other way than that.
    - sinatra 6y ago
      Yes, I thought so (that you didn’t intend for it to be rude).
kerng 6y ago
With more then 99% confidence, FB, Google and Amazon, Visa, Mastercard can all do this today already.

milankragujevic 6y ago

Yes, but not US-based KYC for non-US based persons, i.e. in the EU. My country (Serbia) that's not in the EU had quite a bit of drama due to sending personally identifiable private citizen data (i.e. first and last name, specific personal info, ID card number, unique personal identifier) over Cloudflare which does not currently have a legal representative according to the Serbian Data Protection Regulation, which makes it illegal for the government or any other data processor to send ANYTHING to Cloudflare because Serbia is not in the EU and even though GDPR and ZZPL (our version) are literally identical (to prepare for EU-integrations), GDPR only applies to citizens of countries that are right now in the EU. So, I don't think some people or [all] governments will like this. At all. edit: And yes, SHARE Foundation did sue Google, Facebook, and all other tech giants (including infrastructure providers) in Serbia for ZZPL but apparently only Google appointed a legal representative in Belgrade, and even that seems like a "PR stunt", given how weakly GDPR is being enforced, and it is backed by the whole of EU. No other company replied or appeared in court.

grishka 6y ago

I'm still having a hard time figuring out how this whole Facebook as a gatekeeper thing fits into the anonymous privacy-first blockchain project that is Libra. As I see it, it's either centralized with a KYC check when you sign up, OR it's decentralized with anyone being able to generate a key pair and be a part of the system. So which one of those is Libra, after all?

wmf 6y ago
Didn't they drop the anonymous privacy-first part a month ago? https://davidgerard.co.uk/blockchain/2020/04/16/facebooks-libra-national-currency-tokens-a-new-white-paper-what-this-means/ https://davidgerard.co.uk/blockchain/2020/04/16/facebooks-li...
- grishka 6y ago
  Oh. So at this point the blockchain part is only kept to be able to brag about it being a blockchain. Otherwise it's your ordinary payment system, complete with all the annoyances and limitations that come with it being that.
  - espadrine 6y ago
    Facebook doesn’t want Libra to be a Facebook project, because of the negative connotations associated with the Facebook brand. So the main goal of the blockchain part is to have friends (the Libra association) between which the responsibility is shared. It dilutes concerns and deflects issues: the headlines won’t be “Facebook faces regulatory sanctions” but “The Libra association (Facebook, Uber, Spotify, …) faces regulatory sanctions”. Or at least that was their hope initially. The press, or the regulator, may have pushed scrutiny on Mastercard had they stayed involved, but I doubt they will assume that Spotify is responsible if something wrong happens in the Libra association. But fundamentally, the creation of consensus on transactional history merely elects a leader, and other companies’ servers only record the leader’s blockchain. Additionally, the assets backing the payment system are the real meat behind enabling this technology. And unlike traditional banking, Facebook & cie maintain control over those assets regardless of which company handles the Libra account. Banks can handle your payments because they have ownership of your deposits, but funds do leave the bank when performing a transfer (ACH, SWIFT, etc.) to another bank. In Libra, the assets remain controlled by the Libra association even when making a transfer from one Libra app to another, eg. from Novi to Spotify.

Sargos 6y ago

It kind of depends on what financial products you are talking about right? You can, today, do high margin longs and shorts (dYdX), collatoralized loans (Maker, Compound), buy and sell derivatives (Synthetix), and buy into funds run by fund managers (Set Protocol) without any KYC. Even as an American, though these services will be more important to South Americans, Africans, and Southeast Asians. KYC will still be used by old firms in rich countries, but it's not a given for the future of finance and most people will likely opt out as it's more trouble than it's worth and exposes you to identity theft when one of those firms is hacked and your personal data is stolen by criminals. It's just easier, faster, and safer to not use KYC.

InTheArena 6y ago
This statement is not correct. Southeast Asia and South America are highly focused on KYC, and while in the past, you could opt out, increasingly opting out is not a option. If anything, they are going in the other direction. I can't speak to Africa, but I can tell you that India, China, Vietnam, Thailand do not treat KYC as "optional" and are planning on only tightening restrictions past what the US and EU require. Source - work with Asian and American banks on KYC.
- Sargos 6y ago
  Well, yeah. That's my point. People in those countries not only have to deal with the friction of KYC when even identity documents can be a problem sometimes but they also have to deal with corrupt banking systems and governments where their money and information might not even be safe to give out. These people always have the option of using the services I listed. Anyone can. They are free and unstoppable for anyone who needs them regardless of nationality, race, status, etc.

mmm_grayons 6y ago

Right, so maybe we should be telling the government to stop requiring financial institutions to require identification.

chrisco255 6y ago

Not the decentralized, blockchain-based ones.

rodonn 6y ago
Even for decentralized ones, there are legal requirements for any entity that wants to let you buy or sell. Anyone who buys or sells bitcoin from you without doing KYC is breaking US law.
- chrisco255 6y ago
  No, because Bitcoin is a commodity, it's not legally classified as money. There's no need to do KYC for BTC any more than there is for baseball cards.