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I agree that most of the comments here amount to handwringing (or not understanding what amount of "privacy" is legal), but also, what KYC is really necessary f

I agree that most of the comments here amount to handwringing (or not understanding what amount of "privacy" is legal), but also, what KYC is really necessary for a company like this? If I understand correctly, all they do is pass through transactions. They don't hold customer deposits or provide credit. Isn't all this third party verification a little much?

smachiz 4y ago
The point of KYC is to make money laundering harder (and other transactions that the various governments want to track/police). To that extent, yes, they need to be able to show a regulator who was making those transactions. The actual funding source/bank behind them won't see any detail beyond "privacy.com". Any card issuer (or virtual card issuer) has to do this.
- public_defender 4y ago
  My point is that privacy doesn't need to do KYC because there is no possibility of the customer evading regulators. Assuming that privacy answers subpoenas, they would be able to give the government detailed transaction info and a bank account which would identify the customer. KYC at this level of abstraction doesn't seem to solve any kind of legal problem. I'm glad to be educated by an expert, though. Edit: A sibling explains a good liability reason for this, which makes sense but would not imply any legal reason.
  - smachiz 4y ago
    How do you validate that they own the bank accounts if you don't know who the user is?
    - public_defender 4y ago
      They only verify control. They do the method of making two small deposits and asking what they were.
      - fragmede 4y ago
        Which is why KYC is required. Two small deposits just means you have access to someone's bank account, not that you're actually them. Money launderers will pay mules to use their bank account to move money around.
solumos 4y ago
> what KYC is really necessary for a company like this? If I understand correctly, all they do is pass through transactions. Products like this are particularly susceptible to fraud, especially given that they're charging your bank account directly. Without any KYC, if I as a fraudster get access to your bank login, I can basically drain your account. That opens up a ton of liability to Privacy. Also, the card networks tends to be pretty risk-averse with allowing issuing products access to their networks if there's a lot of fraud going through their services. So, it's much easier to put KYC in place in order to avoid the headache of dealing with fraud/AML/etc
- public_defender 4y ago
  Ok yes, I can see that they would want to have some insulation from having banks charge them back on whole user accounts. That makes sense.
_8j50 4y ago
It is a legal requirement for their bank and for mastercard.
Kye 4y ago
Privacy is backed by an actual credit card ever since they restructured things to get around most sites rejecting their cards due to mistaking them for prepaid.

smachiz 4y ago

The point of KYC is to make money laundering harder (and other transactions that the various governments want to track/police). To that extent, yes, they need to be able to show a regulator who was making those transactions. The actual funding source/bank behind them won't see any detail beyond "privacy.com". Any card issuer (or virtual card issuer) has to do this.

public_defender 4y ago
My point is that privacy doesn't need to do KYC because there is no possibility of the customer evading regulators. Assuming that privacy answers subpoenas, they would be able to give the government detailed transaction info and a bank account which would identify the customer. KYC at this level of abstraction doesn't seem to solve any kind of legal problem. I'm glad to be educated by an expert, though. Edit: A sibling explains a good liability reason for this, which makes sense but would not imply any legal reason.
- smachiz 4y ago
  How do you validate that they own the bank accounts if you don't know who the user is?
  - public_defender 4y ago
    They only verify control. They do the method of making two small deposits and asking what they were.
    - fragmede 4y ago
      Which is why KYC is required. Two small deposits just means you have access to someone's bank account, not that you're actually them. Money launderers will pay mules to use their bank account to move money around.

solumos 4y ago

> what KYC is really necessary for a company like this? If I understand correctly, all they do is pass through transactions. Products like this are particularly susceptible to fraud, especially given that they're charging your bank account directly. Without any KYC, if I as a fraudster get access to your bank login, I can basically drain your account. That opens up a ton of liability to Privacy. Also, the card networks tends to be pretty risk-averse with allowing issuing products access to their networks if there's a lot of fraud going through their services. So, it's much easier to put KYC in place in order to avoid the headache of dealing with fraud/AML/etc

public_defender 4y ago
Ok yes, I can see that they would want to have some insulation from having banks charge them back on whole user accounts. That makes sense.

_8j50 4y ago

It is a legal requirement for their bank and for mastercard.

Kye 4y ago

Privacy is backed by an actual credit card ever since they restructured things to get around most sites rejecting their cards due to mistaking them for prepaid.