7 ms·

So basically, does that mean KYC/AML are officially dead in BTC's environment? The picture was not bright before, but with this kind of innovations, it seems im

by pyrale 5y ago

So basically, does that mean KYC/AML are officially dead in BTC's environment? The picture was not bright before, but with this kind of innovations, it seems impossible for this network to build banking systems that respect regulations.

luciusdomitius 5y ago
Have those regulations ever made any sense? If someone is involved in illegal activity, then prosecute him for that. Banks' purpose is to manage wealth, not to be policemen.
baby 5y ago
BTC is not built to support KYC/AML.
- bigdubs 5y ago
  Then it's going to be weaponized to launder money and be made illegal eventually.
  - webinvest 5y ago
    BTC is less anonymous than cash.
  - baby 5y ago
    That's an argument that has been made yes.
  - vb6sp6 5y ago
    > Then it's going to be weaponized to launder money We should stick with USD. No one does anything illegal with USD
    - mikevm 5y ago
      Yes, which is why all ransomwares ask money in USD, right?
      - skeaker 5y ago
        Your point being what? That because USD is uncommonly used in ransomware it can't be used to commit crimes? Do you really think that no extortion has ever taken place via USD? Because I can guarantee you that money-related crimes and scams happen in just about every single form of currency, even things that technically aren't even currency like gift cards.
        deleted 5y ago
        [deleted]
      - aron_misj 5y ago
        > ransomwares this is not even worth looking at compared to other money-related crimes (just new and in media so people are scared)
    - phone8675309 5y ago
      Holy fucking strawman, Batman! Way to skip over the different potentials for abuse and just dive to the cryptonerd's handwaive argument. Looking forward to your insights about rubber and glue.
      - vb6sp6 5y ago
        "bitcoin is for illegal things" is the OG handwaive argument so nothing substantial was needed to swat it down :)
        phone8675309 5y ago
        There you go strawmanning again. The claim wasn’t "BitCoin is for illegal things (and by comparison, USD is never used for crime)", it was "BitCoin's lack of support for KYC makes it more likely to be attractive to criminals and therefore likely to have its use criminalized" which you CAN'T just hand waive away.
        vb6sp6 5y ago
        I can trade stacks of USD without any KYC.
  - throwaway55421 5y ago
    There is no future tense here. Bitcoin is designed to be fungible - it's digital cash.
    - MerelyMortal 5y ago
      Maybe it was "designed to be", but in reality it isn't. BTC has a history, so if I had 1 BTC, and you had 1 BTC, they wouldn't be equivalent. When you deposit BTC into a Coinbase account from a gambling site, CB shuts down your account. That is irrefutable proof that BTC is not fungible. Compare it to cash which is fungible. If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from.
      - rabite 5y ago
        > If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from. You're off base here. There's serial numbers on money and many databases maintained both public and private meant to track those and flag inflows of marked bills. The bank absolutely might know where you got the cash from -- the difference is that there are legal guarantees for the fungibility of cash. It is enforced by law that if someone pays you a dollar, you are legally obligated to accept that as tender. For all debts both public and private. The fungibility of the dollar is not rooted in lack of ability to track dollars, it is rooted in state violence. Anyways everyone should use Monero. BTC is obviously far less fungible than a dollar.
        MerelyMortal 5y ago
        You're right about dollars being only legally-fungible. It's been hypothesized that there are databases tracking when and where dollars are used based on serial numbers, but to my knowledge, there hasn't been any reliable confirmation of that. If there is such a database, at least it's not publically available like Bitcoin's is. So, I agree with you that Monero should be used over Bitcoin (disclaimer, I own some XMR).
  - aron_misj 5y ago
    > launder money means different things in different places > made illegal it's already illegal here and there
  - wayoutthere 5y ago
    The banks themselves launder money for organized crime. Why shouldn’t money laundering be available to the masses too?
    - can16358p 5y ago
      Banks and governments*
    - danlugo92 5y ago
      Good old "private banking services".
    - wruza 5y ago
      It’s available. You just can’t enter the monopoly.
  - k20CuozQmk 5y ago
    >and be made illegal eventually Allocation of resources to try and ban cryptocurrency (or encryption in general) is probably one of the dumbest things ever conceived, probably even more so than the drug war.
    - michaelmrose 5y ago
      It's entirely easy to make crypto legally useless for legal transactions. The fellow making you coffee won't take crypto if he can only use it to buy drugs. This doesn't mean it will happen but conflating encryption and crypto is poorly considered because we have a long history of regulating commerce.
    - wruza 5y ago
      Regulators don’t have to ban cryptocurrency use among citizens, they only have to ban/overtax everyone trying to cash it out or to run a legal business in it, to reduce liquidity to a level when it’s more risky or expensive than regular laundering. Cryptokids may then play their encryption penny as usual.
  - stale2002 5y ago
    There are a multitude of other crypto coins, that have been around for a long while, that similarly provide lots of privacy, and yet they aren't illegal. People have been yelling about this all being made illegal for literally a decade, and it hasn't happened yet.
    - XorNot 5y ago
      Why would any of this be made illegal? It's a jurisdictional enforcement issue, that isn't targeted at the asset - it's targeted at the individual who thinks they're going to make large financial transactions and not meet the KYC requirements - which will come up when you have to declare how you attained a whole lot of assets or cash to the IRS. Of course, you could not do all those things...but it would be just as illegal and lead to you being just as in jail (and your assets seized) as it would for any other currency. So sure: technically you can hide a bunch of stuff with BTC, but you can do that with USD just fine too (cash is pretty untraceable). The moment you get caught though, you're just as screwed.
      - stale2002 5y ago
        > Why would any of this be made illegal? Of course crypto privacy features are not going to be made illegal. That was my entire argument. Crypto has been around for a decade, and lots of privacy coins exist, and are not illegal. Therefore, other crypto features that make KYC more difficult are also not going to be made illegal.
- Macha 5y ago
  You could even go further: BTC is built to not support KYC/AML.
ulzeraj 5y ago
Good riddance. I don't think KYC/AML are a force for good. Its just more box ticking laws that serve to give a false sense of security while poor people are being excluded from the banking system and normal people have their all their data stolen from centralized databases. Real dangerous criminals don't give a damn about KYC/AML laws and operate freely within the banking framework. The European Central Bank chairwoman is a felon convicted for massive government payouts.
- vkou 5y ago
  > Good riddance. I don't think KYC/AML are a force for good If KYC/AML is not possible in the bitcoin world, you're not going to be getting a world with bitcoin that doesn't have KYC/AML. You're going to get a world with no bitcoin.
  - Mengkudulangsat 5y ago
    Finance without KYC/AML is like air travel without TSA. Everyone remembers those times fondly, but have lost the imagination to believe they are possible again.
    - RC_ITR 5y ago
      And even more forget why we put those systems into place to begin with. Just because the response is a bad one doesn't mean that the problem doesn't exist. FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are, with certainty c. 1, not packing heat.
      - spurgu 5y ago
        > FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are Seriously, how often does this happen? I've flown a fair amount in my life (in Europe though) and I've never seen any commotion on a plane. I've read about some incidents, but I've read about a lot of fucked up stuff that I'm not concerned about in my life. It's along the lines with everything these days. Someone does something bad and someone else gets shocked and then everyone wants to stop something like that from happening ever again, through whatever means, without realizing the incredible inconvenience (and complexity) this causes over time when repeated ad infinitum.
__MatrixMan__ 5y ago
KYC is up to the exchange to implement. There's nothing stopping them from keeping additional records that aren't on the Bitcoin blockchain in order to stay compliant. Of course there's also nothing stopping you from sending your coins somewhere with reduced reporting and spending them from there, but then there never really was in the first place.
coolandsmartrr 5y ago
It may be dead if you run bitcoind or your own wallet, but the majority of users would avoid the complexity of running your own wallet and instead use an exchange to obtain Bitcoin. Opening an account at an exchange would enforce KYC/AML rules anyways, as the operators have to compliant of local laws (which are usually based on guidelines by FATF, a global financial regulation group).

by pyrale 5y ago

luciusdomitius 5y ago

Have those regulations ever made any sense? If someone is involved in illegal activity, then prosecute him for that. Banks' purpose is to manage wealth, not to be policemen.

baby 5y ago

BTC is not built to support KYC/AML.

bigdubs 5y ago
Then it's going to be weaponized to launder money and be made illegal eventually.
- webinvest 5y ago
  BTC is less anonymous than cash.
- baby 5y ago
  That's an argument that has been made yes.
- vb6sp6 5y ago
  > Then it's going to be weaponized to launder money We should stick with USD. No one does anything illegal with USD
  - mikevm 5y ago
    Yes, which is why all ransomwares ask money in USD, right?
    - skeaker 5y ago
      Your point being what? That because USD is uncommonly used in ransomware it can't be used to commit crimes? Do you really think that no extortion has ever taken place via USD? Because I can guarantee you that money-related crimes and scams happen in just about every single form of currency, even things that technically aren't even currency like gift cards.
      - deleted 5y ago
        [deleted]
    - aron_misj 5y ago
      > ransomwares this is not even worth looking at compared to other money-related crimes (just new and in media so people are scared)
  - phone8675309 5y ago
    Holy fucking strawman, Batman! Way to skip over the different potentials for abuse and just dive to the cryptonerd's handwaive argument. Looking forward to your insights about rubber and glue.
    - vb6sp6 5y ago
      "bitcoin is for illegal things" is the OG handwaive argument so nothing substantial was needed to swat it down :)
      - phone8675309 5y ago
        There you go strawmanning again. The claim wasn’t "BitCoin is for illegal things (and by comparison, USD is never used for crime)", it was "BitCoin's lack of support for KYC makes it more likely to be attractive to criminals and therefore likely to have its use criminalized" which you CAN'T just hand waive away.
        vb6sp6 5y ago
        I can trade stacks of USD without any KYC.
- throwaway55421 5y ago
  There is no future tense here. Bitcoin is designed to be fungible - it's digital cash.
  - MerelyMortal 5y ago
    Maybe it was "designed to be", but in reality it isn't. BTC has a history, so if I had 1 BTC, and you had 1 BTC, they wouldn't be equivalent. When you deposit BTC into a Coinbase account from a gambling site, CB shuts down your account. That is irrefutable proof that BTC is not fungible. Compare it to cash which is fungible. If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from.
    - rabite 5y ago
      > If you win money at a casino and deposit it at a bank, the bank doesn't know where you got the cash from. You're off base here. There's serial numbers on money and many databases maintained both public and private meant to track those and flag inflows of marked bills. The bank absolutely might know where you got the cash from -- the difference is that there are legal guarantees for the fungibility of cash. It is enforced by law that if someone pays you a dollar, you are legally obligated to accept that as tender. For all debts both public and private. The fungibility of the dollar is not rooted in lack of ability to track dollars, it is rooted in state violence. Anyways everyone should use Monero. BTC is obviously far less fungible than a dollar.
      - MerelyMortal 5y ago
        You're right about dollars being only legally-fungible. It's been hypothesized that there are databases tracking when and where dollars are used based on serial numbers, but to my knowledge, there hasn't been any reliable confirmation of that. If there is such a database, at least it's not publically available like Bitcoin's is. So, I agree with you that Monero should be used over Bitcoin (disclaimer, I own some XMR).
- aron_misj 5y ago
  > launder money means different things in different places > made illegal it's already illegal here and there
- wayoutthere 5y ago
  The banks themselves launder money for organized crime. Why shouldn’t money laundering be available to the masses too?
  - can16358p 5y ago
    Banks and governments*
  - danlugo92 5y ago
    Good old "private banking services".
  - wruza 5y ago
    It’s available. You just can’t enter the monopoly.
- k20CuozQmk 5y ago
  >and be made illegal eventually Allocation of resources to try and ban cryptocurrency (or encryption in general) is probably one of the dumbest things ever conceived, probably even more so than the drug war.
  - michaelmrose 5y ago
    It's entirely easy to make crypto legally useless for legal transactions. The fellow making you coffee won't take crypto if he can only use it to buy drugs. This doesn't mean it will happen but conflating encryption and crypto is poorly considered because we have a long history of regulating commerce.
  - wruza 5y ago
    Regulators don’t have to ban cryptocurrency use among citizens, they only have to ban/overtax everyone trying to cash it out or to run a legal business in it, to reduce liquidity to a level when it’s more risky or expensive than regular laundering. Cryptokids may then play their encryption penny as usual.
- stale2002 5y ago
  There are a multitude of other crypto coins, that have been around for a long while, that similarly provide lots of privacy, and yet they aren't illegal. People have been yelling about this all being made illegal for literally a decade, and it hasn't happened yet.
  - XorNot 5y ago
    Why would any of this be made illegal? It's a jurisdictional enforcement issue, that isn't targeted at the asset - it's targeted at the individual who thinks they're going to make large financial transactions and not meet the KYC requirements - which will come up when you have to declare how you attained a whole lot of assets or cash to the IRS. Of course, you could not do all those things...but it would be just as illegal and lead to you being just as in jail (and your assets seized) as it would for any other currency. So sure: technically you can hide a bunch of stuff with BTC, but you can do that with USD just fine too (cash is pretty untraceable). The moment you get caught though, you're just as screwed.
    - stale2002 5y ago
      > Why would any of this be made illegal? Of course crypto privacy features are not going to be made illegal. That was my entire argument. Crypto has been around for a decade, and lots of privacy coins exist, and are not illegal. Therefore, other crypto features that make KYC more difficult are also not going to be made illegal.
Macha 5y ago
You could even go further: BTC is built to not support KYC/AML.

ulzeraj 5y ago

Good riddance. I don't think KYC/AML are a force for good. Its just more box ticking laws that serve to give a false sense of security while poor people are being excluded from the banking system and normal people have their all their data stolen from centralized databases. Real dangerous criminals don't give a damn about KYC/AML laws and operate freely within the banking framework. The European Central Bank chairwoman is a felon convicted for massive government payouts.

vkou 5y ago
> Good riddance. I don't think KYC/AML are a force for good If KYC/AML is not possible in the bitcoin world, you're not going to be getting a world with bitcoin that doesn't have KYC/AML. You're going to get a world with no bitcoin.
- Mengkudulangsat 5y ago
  Finance without KYC/AML is like air travel without TSA. Everyone remembers those times fondly, but have lost the imagination to believe they are possible again.
  - RC_ITR 5y ago
    And even more forget why we put those systems into place to begin with. Just because the response is a bad one doesn't mean that the problem doesn't exist. FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are, with certainty c. 1, not packing heat.
    - spurgu 5y ago
      > FWIW, even if TSA is bad at stopping terrorists, I AM glad that all of these people punching flight attendants are Seriously, how often does this happen? I've flown a fair amount in my life (in Europe though) and I've never seen any commotion on a plane. I've read about some incidents, but I've read about a lot of fucked up stuff that I'm not concerned about in my life. It's along the lines with everything these days. Someone does something bad and someone else gets shocked and then everyone wants to stop something like that from happening ever again, through whatever means, without realizing the incredible inconvenience (and complexity) this causes over time when repeated ad infinitum.

__MatrixMan__ 5y ago

KYC is up to the exchange to implement. There's nothing stopping them from keeping additional records that aren't on the Bitcoin blockchain in order to stay compliant. Of course there's also nothing stopping you from sending your coins somewhere with reduced reporting and spending them from there, but then there never really was in the first place.

coolandsmartrr 5y ago

It may be dead if you run bitcoind or your own wallet, but the majority of users would avoid the complexity of running your own wallet and instead use an exchange to obtain Bitcoin. Opening an account at an exchange would enforce KYC/AML rules anyways, as the operators have to compliant of local laws (which are usually based on guidelines by FATF, a global financial regulation group).