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> there was a time when IP blocking was enough to satisfy regulators but now they're basically saying there is nothing a company can do Come on. KYC and AML la

> there was a time when IP blocking was enough to satisfy regulators but now they're basically saying there is nothing a company can do Come on. KYC and AML laws are very well known and were put in place for a reason. When there are actual issues with regulation that could use reform and modernization, straw-manning negligence regarding the black and white parts that most of modern society unanimously agrees upon is always an odd tack.

vmception 6y ago
This isn't about KYC and AML laws, this is about unregistered futures and swaps being merely accessible by US residents.
- yowlingcat 6y ago
  Don't be pedantic. It's /exactly/ about KYC. The spirit of preventing unregistered futures and swaps being "merely" inaccessible by US residents is to /prevent/ money laundering. That's the whole point of registering. Binance has a history of lax KYC [1]. For a global exchange to not risk blowing up means to gain affirmative proof of a user's legal identity, jurisdiction, tax residence. If you try and use an IP ban to loophole around having to add a robust KYC flow into your product, don't be surprised when a major governmental authority (and the general public) remain generally unconvinced that you did your best to be above ground. [1] https://cointelegraph.com/news/binance-sued-for-allegedly-facilitating-money-laundering-with-lax-kyc https://cointelegraph.com/news/binance-sued-for-allegedly-fa...
  - cltby 6y ago
    > For a global exchange to not risk blowing up means to gain affirmative proof of a user's legal identity, jurisdiction, tax residence Financial stability is totally orthogonal to KYC. Exchanges that allow leveraged trading protect themselves via margin requirements.
    - yowlingcat 6y ago
      Sorry, I regret my word choice there. I did not mean "blowing up" in the colloquial definition (from financial instability), but rather from regulatory infractions.
  - thebean11 6y ago
    How would this be a conduit for money laundering if you can't withdraw USD? Your still just stuck with crypto; I'm not sure how it gets you any closer to "clean" money.
    - yowlingcat 6y ago
      Great question. So money laundering consists of several phases -- placement, layering and integration. In particular, even if you can't withdraw USD, there's an enormous amount of movement you can conduct on platform which contributes to the layering phase. Even if you don't place or (to your point) integrate it on platform, you can still get quite a bit closer in the process.
      - thebean11 6y ago
        So using it as a BTC mixer essentially?
        yowlingcat 6y ago
        Yep. Ironically, BTC mixers seem like they'd be quite poor at the job of actually mixing because unlike more sophisticated looking layering activity, it doesn't actually mimic legitimate transaction activity which could otherwise slip under the radar. On the contrary, it sticks out like a sore thumb and because the blockchain is immutable, has been used by the authorities to trace less sophisticated actors.
    - vmception 6y ago
      hi, I started this subthread. it is very easy to money launder with crypto and isn't the crux of my argument. my argument is simply that this case is about unregistered futures and swaps being traded in US jurisdiction, and that its not about aml/kyc. to your question, "if you can't withdraw USD?" is very limiting and seems based on heavy misconceptions about both money laundering and a limited idea of utility of crypto, not sure where to start there. the other person's response talks about reintegration which is a very accurate tip of the iceberg. layer and reintegration is much easier with crypto.
  - vmception 6y ago
    US registered futures and swaps have a KYC/AML component and obligation. The CFTC's case is about Americans accessing unregistered futures and swaps, and with this case they have created no latitude for any company to exclude Americans so that they would never establish jurisdiction. The point is that this AML/KYC "debate" is a complete red herring. It is inherently a component eventually, but not really. Even if they did force AML/KYC before any kind of trading, then it's still Americans trading unregistered futures and swaps. So you see, unless the CFTC says "we're coming after you because of the lax AML/KYC" then its not about AML/KYC. Could they force AML/KYC and then say "ah you're American you can't trade", sure. Could an American use a fake ID and the CFTC uses that to establish jurisdiction, sure. So the productive thing here would be for the CFTC to be more collaborative and say exactly what the exact threshold a non-US organization can have to be in a safe-harbor with the CFTC.
    - ketamine__ 6y ago
      So because someone might use a fake ID you think Binance shouldn't be responsible for doing it in the first place?
      - vmception 6y ago
        I don't have any opinion on that I have an opinion that the productive thing here would be for the CFTC to be more collaborative and say exactly what the exact threshold a non-US organization can have to be in a safe-harbor with the CFTC
- akyu 6y ago
  It is about KYC. This is how they get their foot in the door.
  - yowlingcat 6y ago
    Yep, that's my exact point. That's what makes KYC such an important obligation from the firm's standpoint because the only way you can prove that you did everything within your power to obey it is to require it before the user is allowed touch any kind of asset on platform.
    - bequanna 6y ago
      Why should non-US residents who are consumers of a non-US based service be subject to US KYC?
      - pfisch 6y ago
        Because money laundering is a crime that doesn't recognize borders. If the US wants to take a strong anti money laundering position that is something I agree with. It is hard not to when you see awful people taking over governments the world over and stealing completely insane amounts of wealth from the people. This isn't nickel and dime crimes. These are insane crimes that do damage to billions of people on scales you can't even measure. These people should honestly face life imprisonment, but they never do.
        CryptoPunk 6y ago
        How far does it go? Invade other countries to spread democracy and rule of law? And how much privacy do you violate to stop bad actors? You're okay with AML laws, which are a form of warrantless financial mass-surveillance, so how about wiretapping all communications as well? How about prohibiting end-to-end-encryption, and public access to strong cryptography? As money becomes wholly digital, you will need warrantless mass-surveillance of all communication to maintain warrantless mass-surveillance of all financial transactions.
wickoff 6y ago
As far as I know leveraged trading isn't accessible to Binance users without KYC.
CryptoPunk 6y ago
KYC and AML laws are a type of warrantless mass-surveillance that is antithetical to a free society that values privacy rights. They are also extremely ineffective at stopping crime, while imposing enormous economic and human costs: https://www.reddit.com/r/btc/comments/lsk4ui/kill_your_customers/ https://www.reddit.com/r/btc/comments/lsk4ui/kill_your_custo...
- yowlingcat 6y ago
  Please stop spamming mindless crypto influencer drivel.
  - CryptoPunk 6y ago
    Nothing mindless about being concerned about 1. privacy violations, 2. additional financial friction and 3. financial exclusion, that are documented consequences of AML laws. If you'd like more objectives citations supporting these points, I'd be happy to provide them, but your belligerent demands that I not express myself, and your disingenuous characterizations of my arguments as "spam", are not constructive.
    - yowlingcat 6y ago
      What is mindless is posting a video which cannot be read and forces your reader to be subject to propagandized, hyperbolized points exaggerated for effect. You yourself admit that there are more "objective citations" supporting these points. If that's the case, you could have led with them. Why not lead with them? Why lead with something less objective? It's not arguing in good faith, it's arguing in proselytizing faith. It's deeply suspicious. My characterizations of your arguments as spam are constructive, given that they've led you to admit that you're not leading with objectivity or respect for your reader. I'd say they've accomplished their goal.
      - CryptoPunk 6y ago
        >>If that's the case, you could have led with them. Why not lead with them? Because I'd need to provide multiple citations, and I felt that was overkill for a starter comment in an informal discussion. I thought if someone disputed the claims in the succinct video I provided, I could then provide a more academic-style comment with the sources you mention. Calling it mindless - not to mention 'spam' despite it being completely ontopic, just because you disagree with the veracity of the arguments - instead of just asking for more objective sources, is belligerent to the point of being unconstructive.

vmception 6y ago

This isn't about KYC and AML laws, this is about unregistered futures and swaps being merely accessible by US residents.

yowlingcat 6y ago
Don't be pedantic. It's /exactly/ about KYC. The spirit of preventing unregistered futures and swaps being "merely" inaccessible by US residents is to /prevent/ money laundering. That's the whole point of registering. Binance has a history of lax KYC [1]. For a global exchange to not risk blowing up means to gain affirmative proof of a user's legal identity, jurisdiction, tax residence. If you try and use an IP ban to loophole around having to add a robust KYC flow into your product, don't be surprised when a major governmental authority (and the general public) remain generally unconvinced that you did your best to be above ground. [1] https://cointelegraph.com/news/binance-sued-for-allegedly-facilitating-money-laundering-with-lax-kyc https://cointelegraph.com/news/binance-sued-for-allegedly-fa...
- cltby 6y ago
  > For a global exchange to not risk blowing up means to gain affirmative proof of a user's legal identity, jurisdiction, tax residence Financial stability is totally orthogonal to KYC. Exchanges that allow leveraged trading protect themselves via margin requirements.
  - yowlingcat 6y ago
    Sorry, I regret my word choice there. I did not mean "blowing up" in the colloquial definition (from financial instability), but rather from regulatory infractions.
- thebean11 6y ago
  How would this be a conduit for money laundering if you can't withdraw USD? Your still just stuck with crypto; I'm not sure how it gets you any closer to "clean" money.
  - yowlingcat 6y ago
    Great question. So money laundering consists of several phases -- placement, layering and integration. In particular, even if you can't withdraw USD, there's an enormous amount of movement you can conduct on platform which contributes to the layering phase. Even if you don't place or (to your point) integrate it on platform, you can still get quite a bit closer in the process.
    - thebean11 6y ago
      So using it as a BTC mixer essentially?
      - yowlingcat 6y ago
        Yep. Ironically, BTC mixers seem like they'd be quite poor at the job of actually mixing because unlike more sophisticated looking layering activity, it doesn't actually mimic legitimate transaction activity which could otherwise slip under the radar. On the contrary, it sticks out like a sore thumb and because the blockchain is immutable, has been used by the authorities to trace less sophisticated actors.
  - vmception 6y ago
    hi, I started this subthread. it is very easy to money launder with crypto and isn't the crux of my argument. my argument is simply that this case is about unregistered futures and swaps being traded in US jurisdiction, and that its not about aml/kyc. to your question, "if you can't withdraw USD?" is very limiting and seems based on heavy misconceptions about both money laundering and a limited idea of utility of crypto, not sure where to start there. the other person's response talks about reintegration which is a very accurate tip of the iceberg. layer and reintegration is much easier with crypto.
- vmception 6y ago
  US registered futures and swaps have a KYC/AML component and obligation. The CFTC's case is about Americans accessing unregistered futures and swaps, and with this case they have created no latitude for any company to exclude Americans so that they would never establish jurisdiction. The point is that this AML/KYC "debate" is a complete red herring. It is inherently a component eventually, but not really. Even if they did force AML/KYC before any kind of trading, then it's still Americans trading unregistered futures and swaps. So you see, unless the CFTC says "we're coming after you because of the lax AML/KYC" then its not about AML/KYC. Could they force AML/KYC and then say "ah you're American you can't trade", sure. Could an American use a fake ID and the CFTC uses that to establish jurisdiction, sure. So the productive thing here would be for the CFTC to be more collaborative and say exactly what the exact threshold a non-US organization can have to be in a safe-harbor with the CFTC.
  - ketamine__ 6y ago
    So because someone might use a fake ID you think Binance shouldn't be responsible for doing it in the first place?
    - vmception 6y ago
      I don't have any opinion on that I have an opinion that the productive thing here would be for the CFTC to be more collaborative and say exactly what the exact threshold a non-US organization can have to be in a safe-harbor with the CFTC
akyu 6y ago
It is about KYC. This is how they get their foot in the door.
- yowlingcat 6y ago
  Yep, that's my exact point. That's what makes KYC such an important obligation from the firm's standpoint because the only way you can prove that you did everything within your power to obey it is to require it before the user is allowed touch any kind of asset on platform.
  - bequanna 6y ago
    Why should non-US residents who are consumers of a non-US based service be subject to US KYC?
    - pfisch 6y ago
      Because money laundering is a crime that doesn't recognize borders. If the US wants to take a strong anti money laundering position that is something I agree with. It is hard not to when you see awful people taking over governments the world over and stealing completely insane amounts of wealth from the people. This isn't nickel and dime crimes. These are insane crimes that do damage to billions of people on scales you can't even measure. These people should honestly face life imprisonment, but they never do.
      - CryptoPunk 6y ago
        How far does it go? Invade other countries to spread democracy and rule of law? And how much privacy do you violate to stop bad actors? You're okay with AML laws, which are a form of warrantless financial mass-surveillance, so how about wiretapping all communications as well? How about prohibiting end-to-end-encryption, and public access to strong cryptography? As money becomes wholly digital, you will need warrantless mass-surveillance of all communication to maintain warrantless mass-surveillance of all financial transactions.

wickoff 6y ago

As far as I know leveraged trading isn't accessible to Binance users without KYC.

CryptoPunk 6y ago

KYC and AML laws are a type of warrantless mass-surveillance that is antithetical to a free society that values privacy rights. They are also extremely ineffective at stopping crime, while imposing enormous economic and human costs: https://www.reddit.com/r/btc/comments/lsk4ui/kill_your_customers/ https://www.reddit.com/r/btc/comments/lsk4ui/kill_your_custo...

yowlingcat 6y ago
Please stop spamming mindless crypto influencer drivel.
- CryptoPunk 6y ago
  Nothing mindless about being concerned about 1. privacy violations, 2. additional financial friction and 3. financial exclusion, that are documented consequences of AML laws. If you'd like more objectives citations supporting these points, I'd be happy to provide them, but your belligerent demands that I not express myself, and your disingenuous characterizations of my arguments as "spam", are not constructive.
  - yowlingcat 6y ago
    What is mindless is posting a video which cannot be read and forces your reader to be subject to propagandized, hyperbolized points exaggerated for effect. You yourself admit that there are more "objective citations" supporting these points. If that's the case, you could have led with them. Why not lead with them? Why lead with something less objective? It's not arguing in good faith, it's arguing in proselytizing faith. It's deeply suspicious. My characterizations of your arguments as spam are constructive, given that they've led you to admit that you're not leading with objectivity or respect for your reader. I'd say they've accomplished their goal.
    - CryptoPunk 6y ago
      >>If that's the case, you could have led with them. Why not lead with them? Because I'd need to provide multiple citations, and I felt that was overkill for a starter comment in an informal discussion. I thought if someone disputed the claims in the succinct video I provided, I could then provide a more academic-style comment with the sources you mention. Calling it mindless - not to mention 'spam' despite it being completely ontopic, just because you disagree with the veracity of the arguments - instead of just asking for more objective sources, is belligerent to the point of being unconstructive.