14 ms·

KYC. No, Thanks

105 points by koqoo 3y ago

deleted 3y ago
[deleted]
superkuh 3y ago
There are some things that should require KYC. Like accepting DMCA claims. The claimaint should have to be a real verified person before the host should be required to act on a DMCA complaint.
- jMyles 3y ago
  Most of the things that seem like good ideas for KYC, such as DMCA claims, are better to be rendered nonexistent in the first place.
  - superkuh 3y ago
    Right. I'm just highlighting from a different angle the point of the main article: KYC "protections" are not implemented to protect human people. If that was the intention they'd be applied equally in all legal contexts like re: DMCA claims, but the fact that they aren't shows the intentions of regulators for KYC in practice.
multjoy 3y ago
Because anonymous banking facilities have never been used to launder vast amounts of cash...
- logicchains 3y ago
  There's zero evidence that AML laws have actually led to any reduction in crime, while there's countless evidence of them causing unnecessary difficulty to law-abiding citizens. AML proponents should be required to demonstrate that the measures they propose actually lead to an empirically measurable reduction in crime, otherwise it's just a massive violation of citizens' financial privacy rights for no gain.
  - namdnay 3y ago
    How about we set up a parallel banking system with none of the rules and regulations, and see what happens? Oh yeah we did that a few years ago and it was scams all the way down :)
    - logicchains 3y ago
      There are also an abundance of people getting scammed the old fashioned way, KYC's done nothing to reduce that as the amount of people losing money to online scams has increased in recent years. The crypto ecosystem has scams but it also has genuine financial privacy with Monero, while the average person in a western country has zero options for financial privacy in the traditional banking system.
      - namdnay 3y ago
        What do you mean by “financial privacy”? Hiding stuff from the taxman?
        southernplaces7 3y ago
        Yes, that too, but also just fucking privacy. A basic notion that your financial movements shouldn't be an open book to any bureaucrat, functionary, corporate drone or algorithm under the sun. We rightfully take personal privacy seriously in many other things, but suddenly you try to apply the logic to something as deeply sensitive as one's economic life and many would-be nannies lose their shit. Many of you on this very comment thread sound like government agents ranting about "protecting children" with their attempts at encryption backdoors. The only difference is that you apply it to preventing people from controlling the keys to how and where they keep or send their money. Why? Because "terrorists!" "Money Laundering!", Tax evasion!" Oh my! How many of these justifications wouldn't even exist if government wasn't so heavy handed in slathering on endless regulations to criminalize whole areas of human activity that never needed to be harmful or criminal in the first place? I'll also note here that in many countries, employees at major banks and at major government offices collude with organized crime to a pervasive degree, and actively look at the accounts of people with signs of having come into large amounts of money (but without corresponding protective power of their own) for the sake of extorting or even kidnapping them. I live in one such country. It's easy to bleat about the need for KYC and making sure everyone "pays their fair share" (a thing that anyhow barely functions as claimed even in the most KYC-obsessed countries, since the wealthy use all kinds of legal loopholes and special connections to keep their funds safe) if you live in a place where the powers that be aren't overtly parasitical and criminal. It's a little more difficult to apply the same in other parts of the world.
yieldcrv 3y ago
the KYC regime operates under the idea that its working because fraudulent identities work. nobody here would ever know if a bank account currently exists in their name at a different institution, if it was properly used to simply accept payments for legal services and not leave an account in overdraft. the entire concept of whitelisting transactions is a fools errand
verall 3y ago
> Realistically, KYC might deter a small fraction – let's say about 1% – of these malefactors. You may as well say, "KYC might deter a large fraction - let's say about 99% of these malefactors" There's no evidence provided for these numbers. It's one thing to make an assumption which is counter to your argument - "Even if 99% of criminals are deterred, it creates an unconscionable burden upon those whose identities are stolen" or etc. It's quite another just to assume your own argument. Let's assume cops prevent 99% of crime - it's worth their brutality or whatever. Let's assume cops prevent 1% of crime - we would be better off with 1% more crime and no cops or whatever. It's absolutely pointless. The article goes on to immediately compare KYC with widespread facial recognition. Why are these equivalent? They could at least try to engage with arguments for KYC - that large financial institutions should not be making life easier for criminals. Historically, a bank obviously knew their customers - they had to open the accounts in person, talk with the bank manager, etc.
- logicchains 3y ago
  >The article goes on to immediately compare KYC with widespread facial recognition. Why are these equivalent They're both violations of people's privacy. >There's no evidence provided for these numbers And KYC proponents provide no empirical evidence that KYC has actually led to a measurable reduction in organised crime. The onus should be on them to demonstrate why it's effective enough to justify the violation of citizens' privacy that it entails.
  - verall 3y ago
    I'm not defending KYC here (tho I think it is necessary personally). I'm just requesting the author actually try to make an argument.
  - tptacek 3y ago
    So is a license plate. Privacy is not an absolute right.
    - hobobaggins 3y ago
idopmstuff 3y ago
> To sum up, KYC does not protect individuals This is true, but it's also not the point. KYC isn't about protecting individuals - it's about protecting the system (financial and geopolitical) as a whole. Can it be defeated? Of course it can. But it's not the sole line of defense against these sorts of things - it's part of a broader system comprised of internal bank security procedures, government monitoring and after-the-fact investigation of financial crimes. I don't mean to say that everything written here is wrong, but this is a complex topic that has meaningful tradeoffs of security vs. being free of surveillance and convenience. This sort of blind CRPYTO GUD GUBMINT BAD writing that doesn't even pretend to attempt to understand its topic at any meaningful level of depth doesn't exactly contribute to the discourse.
- latchkey 3y ago
  > KYC isn't about protecting individuals - it's about protecting the system (financial and geopolitical) as a whole. At the cost of individual privacy.
- theturtletalks 3y ago
  Your comment is quite naive and doesn't understand the damage KYC and AML laws do to businesses. The GUBMINT BAD because they effectively gave financial institutions the right to decide who can do business and who can't. That means effectively deciding the winners and losers. They can ban and deny any company from accepting payments only behind the ruse of KYC and AML laws. They don't have to tell you why (security thru obscurity). Let's take OnlyFans. OnlyFans can accept payments using Stripe and other payment processors. Now try to make your own OnlyFans. The banks say you can't. Isn't this what laws are for? Selling porn is legal, yet payment processors decide what you can sell online. And to think they don't decide which company can process payment or not, effectively decides who wins. This is where decentralization and CRPYTO GUD comes from. I don't want a few companies deciding what I can sell online, especially if it's legal, and they hide behind KYC/AML laws afterwards. Just looking at credit card processing fees where we essentially have a rent-seeking fee that will continually increase and is not even refunded to the merchant when a customer returns something. That's the power the government gave to these financial institutions with these laws.
namdnay 3y ago
> Realistically, KYC might deter a small fraction – let's say about 1% – of these malefactors. I too can pull arbitrary statistics straight out of my backside, and use them to argue my point Why not 10%? Why not 10000% in fact (if we’re comparing it to the number of current bad actors)? Do you really think there wouldn’t be more tax cheaters if nobody did KYC checks? Come on…
twic 3y ago
This is definitely an interesting position, but it's an argument that needs to be backed up with solid evidence about the costs and ineffectiveness of KYC. This post contains zero such evidence, and as such, is entirely worthless.
- logicchains 3y ago
  Proponents of KYC also never backed their policies with empirical evidence of their effectiveness; the onus should be on them to prove that KYC is effective enough to justify the inconveniences and privacy violations it entails.
  - paulgb 3y ago
    It’s hard to prove a law that has a deterrent effect, since you can see the number of people it “caught” but the people it deterred are invisible. The best proxy for the deterrent effect is how much criminals need to pay to launder money. I can’t find a good source on this, but some anectdata that put it between 15-50%.
    - Kamq 3y ago
      I mean, sure, but if you're demanding detailed statistics from the anti-side (the start of this thread), letting the pro-side gesture vaguely in the direction of hard to measure deterrence seems like an isolated demand for rigor.
MattPalmer1086 3y ago
Anonymous terrorist and organised crime funding scam technology? No thanks ;)
papichulo2023 3y ago
It forces bad actor to go for more complicated schemed to avoid regulations. Author's point is like saying having cops near a bank is useless because robbers will just avoid those banks.
phendrenad2 3y ago
> KYC is being used by many businesses as a convenient gatekeeping tool. A perfect excuse based on a "legal" procedure they are obliged to. This. Right here. KYC is prone to abuse for censorship, and does anyone believe that it isn't already? Does anyone believe that KYC scores aren't going to eventually be linked to credit scores, ESG scores, perhaps social credit scores someday?
nimbius 3y ago
kyc is a lot more than just "muh privacy," it is effectively the lynchpin of how the United States weaponizes its monetary standard against other nations and individuals. KYC allows the state to maintain the illusion of a free and fair trial by jury whilst at the same time freezing all monetary assets you could use to ever defend yourself under the guise of 'crime', effectively guaranteeing themselves a win. and to clarify the article, not all cryptocurrencies are set in stone traceable. Monero enjoys ephemeral transactions that are so untraceable, no ones claimed the US government bounty for a proof-of-concept yet. In turn, youll likely see most KYC exchanges get strong-armed into dropping support for mondero-like currencies altogether. your entire monetary life is effectively for review. visa/amex/mc all tag your transactions with a vendor code as part of KYC to build a profile of your spending and sell analytics to economists about what you buy (food, guns, clothing, cars, etc..) move too much money in cash? KYC kicks in and youll need to explain to the teller why you want that money. Dont want to explain? they will inform the FBI under the bank secrecy act. want to know if they reported you? you cant (its literally illegal.)
empath-nirvana 3y ago
The purpose of KYC laws is to replace difficult to prove and prosecute crimes like human trafficking, terrorism and drug dealing, with easy to prove and prosecute crimes like "lying on banking forms" and "money laundering" and "tax evasion." Everyone knows that criminals lie on these forms and _that is the point_. They now have an easy to prosecute charge just waiting for them if they ever attract the attention of the authorities. They just need to look into where their money is coming from and there will be a lot of ways they can prosecute them. https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...
- voakbasda 3y ago
  This was the strategy used to prosecute Al Capone. IIRC, they couldn’t get enough evidence to directly charge him for his other (violent) crimes, so they built a successful case of tax evasion. With such leverage, they started to dismantle his organization, whereupon they found the evidence to press more charges.
  - hobobaggins 3y ago
    So why not just throw everyone's rights out and just start searching their homes for evidence of crimes, or at least something that can be prosecuted because it might be a crime? We'll surely get a significant amount of people who are doing or own things they shouldn't. Maybe even as high as 1%!
    - voakbasda 3y ago
      I never said that I approve of these tactics. Quite the opposite. I meant it as a warning: the KYC system will be used against you. If you commit a crime (or even rock the boat too much), expect these records to be combed over and leveraged against you. At the very least, authorities will likely obtain a search warrant and systematically attempt to destroy your life.
  - yieldcrv 3y ago
    Al Capone would have passed KYC everywhere as a US citizen And Al Capone could have used a non-profit as they are tax exempt, where money laundering - the crime - is not possible because there are potentially no taxes to report that's the system
weare138 3y ago
The problem is policies like KYC are often just corporate CYA (cover your ass) policies. Making the security measures as overt as possible gives corporations plausible deniability.
lottin 3y ago
The purpose of KYC isn't just to combat terrorism and financial crime, but also to protect businesses from the actions of unscrupulous individuals, which is common in low-trust societies. As Western society transitions from high-trust to low-trust, I predict KYC will only become more widespread.
apimade 3y ago
How do you handle customer password resets when an email service provider locks them out? Do you just keep the money? Or do you send it to the government who keeps it, because they can’t assign it to a person? KYC is a speed-bump for criminals, yes. But it’s also the only way to support the finance system for regular people. What happens when you have a financial system where there is no people or traceability tied to funds? You know the answer, it’s a loaded question.
- crtasm 3y ago
  Send $1 from a previously used payment account/card?
  - apimade 3y ago
    At that point you're effectively delegating KYC through Visa/Mastercard who will run KYC processes. It also ignores scenarios where multiple things are stolen at once (eg malware, cons, etc).
    - crtasm 3y ago
      I can't think of a type of online business that stores money but doesn't take payments from bands/credit cards/paypal/etc. ?
deleted 3y ago
[deleted]
tjscott 3y ago
A lot of the usual misconceptions about KYC in here (that you need ID, or how the government insists KYC is implemented). I find Patrick McKenzie’s (patio11) deep dive into KYC [1] useful to understand more of why KYC exists and what is and isn’t in the law. 1. https://www.bitsaboutmoney.com/archive/kyc-and-aml-beyond-the-acronyms/ https://www.bitsaboutmoney.com/archive/kyc-and-aml-beyond-th...
dangus 3y ago
I don’t understand the issue here. It seems like various KYC regulations are the status quo. Is there a specific bill or proposal the article is against? That was left totally unclear. I don’t think tin foil hat shout into the clouds articles are very useful. Is the author an expert on money laundering or organized crime? Give me some reasons that aren’t just soap box speeches about freedom. Finally, I think that it’s pretty obvious how basic identity regulations can work. If a bar has an ID scanner that accesses a state database to look up your picture on file that can trivially defeat a fake ID. If a car dealership does the same they can prevent selling a car to someone who isn’t licensed to drive. Seems pretty normal to me.
FooBarBizBazz 3y ago
KYC effectively means that if you don't own property and don't pay rent, then you're not a full legal person. You need an address, and a cheap P.O. box won't cut it. Need to live in your car? Want to live in your RV or boat? Planning on selling everything and backpacking around? Good luck registering for a driver's license or a checking account.
jqpabc123 3y ago
Laws can be circumvented --- therefore, laws are useless??? This line of reasoning is highly suspect --- particularly when based on assumptions without concrete supporting evidence.

105 points by koqoo 3y ago

deleted 3y ago

[deleted]

There are some things that should require KYC. Like accepting DMCA claims. The claimaint should have to be a real verified person before the host should be required to act on a DMCA complaint.

jMyles 3y ago
Most of the things that seem like good ideas for KYC, such as DMCA claims, are better to be rendered nonexistent in the first place.
- superkuh 3y ago
  Right. I'm just highlighting from a different angle the point of the main article: KYC "protections" are not implemented to protect human people. If that was the intention they'd be applied equally in all legal contexts like re: DMCA claims, but the fact that they aren't shows the intentions of regulators for KYC in practice.

multjoy 3y ago

Because anonymous banking facilities have never been used to launder vast amounts of cash...

logicchains 3y ago
There's zero evidence that AML laws have actually led to any reduction in crime, while there's countless evidence of them causing unnecessary difficulty to law-abiding citizens. AML proponents should be required to demonstrate that the measures they propose actually lead to an empirically measurable reduction in crime, otherwise it's just a massive violation of citizens' financial privacy rights for no gain.
- namdnay 3y ago
  How about we set up a parallel banking system with none of the rules and regulations, and see what happens? Oh yeah we did that a few years ago and it was scams all the way down :)
  - logicchains 3y ago
    There are also an abundance of people getting scammed the old fashioned way, KYC's done nothing to reduce that as the amount of people losing money to online scams has increased in recent years. The crypto ecosystem has scams but it also has genuine financial privacy with Monero, while the average person in a western country has zero options for financial privacy in the traditional banking system.
    - namdnay 3y ago
      What do you mean by “financial privacy”? Hiding stuff from the taxman?
      - southernplaces7 3y ago
        Yes, that too, but also just fucking privacy. A basic notion that your financial movements shouldn't be an open book to any bureaucrat, functionary, corporate drone or algorithm under the sun. We rightfully take personal privacy seriously in many other things, but suddenly you try to apply the logic to something as deeply sensitive as one's economic life and many would-be nannies lose their shit. Many of you on this very comment thread sound like government agents ranting about "protecting children" with their attempts at encryption backdoors. The only difference is that you apply it to preventing people from controlling the keys to how and where they keep or send their money. Why? Because "terrorists!" "Money Laundering!", Tax evasion!" Oh my! How many of these justifications wouldn't even exist if government wasn't so heavy handed in slathering on endless regulations to criminalize whole areas of human activity that never needed to be harmful or criminal in the first place? I'll also note here that in many countries, employees at major banks and at major government offices collude with organized crime to a pervasive degree, and actively look at the accounts of people with signs of having come into large amounts of money (but without corresponding protective power of their own) for the sake of extorting or even kidnapping them. I live in one such country. It's easy to bleat about the need for KYC and making sure everyone "pays their fair share" (a thing that anyhow barely functions as claimed even in the most KYC-obsessed countries, since the wealthy use all kinds of legal loopholes and special connections to keep their funds safe) if you live in a place where the powers that be aren't overtly parasitical and criminal. It's a little more difficult to apply the same in other parts of the world.

yieldcrv 3y ago

the KYC regime operates under the idea that its working because fraudulent identities work. nobody here would ever know if a bank account currently exists in their name at a different institution, if it was properly used to simply accept payments for legal services and not leave an account in overdraft. the entire concept of whitelisting transactions is a fools errand

verall 3y ago

> Realistically, KYC might deter a small fraction – let's say about 1% – of these malefactors. You may as well say, "KYC might deter a large fraction - let's say about 99% of these malefactors" There's no evidence provided for these numbers. It's one thing to make an assumption which is counter to your argument - "Even if 99% of criminals are deterred, it creates an unconscionable burden upon those whose identities are stolen" or etc. It's quite another just to assume your own argument. Let's assume cops prevent 99% of crime - it's worth their brutality or whatever. Let's assume cops prevent 1% of crime - we would be better off with 1% more crime and no cops or whatever. It's absolutely pointless. The article goes on to immediately compare KYC with widespread facial recognition. Why are these equivalent? They could at least try to engage with arguments for KYC - that large financial institutions should not be making life easier for criminals. Historically, a bank obviously knew their customers - they had to open the accounts in person, talk with the bank manager, etc.

logicchains 3y ago
>The article goes on to immediately compare KYC with widespread facial recognition. Why are these equivalent They're both violations of people's privacy. >There's no evidence provided for these numbers And KYC proponents provide no empirical evidence that KYC has actually led to a measurable reduction in organised crime. The onus should be on them to demonstrate why it's effective enough to justify the violation of citizens' privacy that it entails.
- verall 3y ago
  I'm not defending KYC here (tho I think it is necessary personally). I'm just requesting the author actually try to make an argument.
- tptacek 3y ago
  So is a license plate. Privacy is not an absolute right.
  - hobobaggins 3y ago

idopmstuff 3y ago

> To sum up, KYC does not protect individuals This is true, but it's also not the point. KYC isn't about protecting individuals - it's about protecting the system (financial and geopolitical) as a whole. Can it be defeated? Of course it can. But it's not the sole line of defense against these sorts of things - it's part of a broader system comprised of internal bank security procedures, government monitoring and after-the-fact investigation of financial crimes. I don't mean to say that everything written here is wrong, but this is a complex topic that has meaningful tradeoffs of security vs. being free of surveillance and convenience. This sort of blind CRPYTO GUD GUBMINT BAD writing that doesn't even pretend to attempt to understand its topic at any meaningful level of depth doesn't exactly contribute to the discourse.

latchkey 3y ago
> KYC isn't about protecting individuals - it's about protecting the system (financial and geopolitical) as a whole. At the cost of individual privacy.
theturtletalks 3y ago
Your comment is quite naive and doesn't understand the damage KYC and AML laws do to businesses. The GUBMINT BAD because they effectively gave financial institutions the right to decide who can do business and who can't. That means effectively deciding the winners and losers. They can ban and deny any company from accepting payments only behind the ruse of KYC and AML laws. They don't have to tell you why (security thru obscurity). Let's take OnlyFans. OnlyFans can accept payments using Stripe and other payment processors. Now try to make your own OnlyFans. The banks say you can't. Isn't this what laws are for? Selling porn is legal, yet payment processors decide what you can sell online. And to think they don't decide which company can process payment or not, effectively decides who wins. This is where decentralization and CRPYTO GUD comes from. I don't want a few companies deciding what I can sell online, especially if it's legal, and they hide behind KYC/AML laws afterwards. Just looking at credit card processing fees where we essentially have a rent-seeking fee that will continually increase and is not even refunded to the merchant when a customer returns something. That's the power the government gave to these financial institutions with these laws.

namdnay 3y ago

> Realistically, KYC might deter a small fraction – let's say about 1% – of these malefactors. I too can pull arbitrary statistics straight out of my backside, and use them to argue my point Why not 10%? Why not 10000% in fact (if we’re comparing it to the number of current bad actors)? Do you really think there wouldn’t be more tax cheaters if nobody did KYC checks? Come on…

twic 3y ago

This is definitely an interesting position, but it's an argument that needs to be backed up with solid evidence about the costs and ineffectiveness of KYC. This post contains zero such evidence, and as such, is entirely worthless.

logicchains 3y ago
Proponents of KYC also never backed their policies with empirical evidence of their effectiveness; the onus should be on them to prove that KYC is effective enough to justify the inconveniences and privacy violations it entails.
- paulgb 3y ago
  It’s hard to prove a law that has a deterrent effect, since you can see the number of people it “caught” but the people it deterred are invisible. The best proxy for the deterrent effect is how much criminals need to pay to launder money. I can’t find a good source on this, but some anectdata that put it between 15-50%.
  - Kamq 3y ago
    I mean, sure, but if you're demanding detailed statistics from the anti-side (the start of this thread), letting the pro-side gesture vaguely in the direction of hard to measure deterrence seems like an isolated demand for rigor.

MattPalmer1086 3y ago

Anonymous terrorist and organised crime funding scam technology? No thanks ;)

papichulo2023 3y ago

It forces bad actor to go for more complicated schemed to avoid regulations. Author's point is like saying having cops near a bank is useless because robbers will just avoid those banks.

phendrenad2 3y ago

> KYC is being used by many businesses as a convenient gatekeeping tool. A perfect excuse based on a "legal" procedure they are obliged to. This. Right here. KYC is prone to abuse for censorship, and does anyone believe that it isn't already? Does anyone believe that KYC scores aren't going to eventually be linked to credit scores, ESG scores, perhaps social credit scores someday?

nimbius 3y ago

kyc is a lot more than just "muh privacy," it is effectively the lynchpin of how the United States weaponizes its monetary standard against other nations and individuals. KYC allows the state to maintain the illusion of a free and fair trial by jury whilst at the same time freezing all monetary assets you could use to ever defend yourself under the guise of 'crime', effectively guaranteeing themselves a win. and to clarify the article, not all cryptocurrencies are set in stone traceable. Monero enjoys ephemeral transactions that are so untraceable, no ones claimed the US government bounty for a proof-of-concept yet. In turn, youll likely see most KYC exchanges get strong-armed into dropping support for mondero-like currencies altogether. your entire monetary life is effectively for review. visa/amex/mc all tag your transactions with a vendor code as part of KYC to build a profile of your spending and sell analytics to economists about what you buy (food, guns, clothing, cars, etc..) move too much money in cash? KYC kicks in and youll need to explain to the teller why you want that money. Dont want to explain? they will inform the FBI under the bank secrecy act. want to know if they reported you? you cant (its literally illegal.)

empath-nirvana 3y ago

The purpose of KYC laws is to replace difficult to prove and prosecute crimes like human trafficking, terrorism and drug dealing, with easy to prove and prosecute crimes like "lying on banking forms" and "money laundering" and "tax evasion." Everyone knows that criminals lie on these forms and _that is the point_. They now have an easy to prosecute charge just waiting for them if they ever attract the attention of the authorities. They just need to look into where their money is coming from and there will be a lot of ways they can prosecute them. https://www.bitsaboutmoney.com/archive/optimal-amount-of-fraud/ https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...

voakbasda 3y ago
This was the strategy used to prosecute Al Capone. IIRC, they couldn’t get enough evidence to directly charge him for his other (violent) crimes, so they built a successful case of tax evasion. With such leverage, they started to dismantle his organization, whereupon they found the evidence to press more charges.
- hobobaggins 3y ago
  So why not just throw everyone's rights out and just start searching their homes for evidence of crimes, or at least something that can be prosecuted because it might be a crime? We'll surely get a significant amount of people who are doing or own things they shouldn't. Maybe even as high as 1%!
  - voakbasda 3y ago
    I never said that I approve of these tactics. Quite the opposite. I meant it as a warning: the KYC system will be used against you. If you commit a crime (or even rock the boat too much), expect these records to be combed over and leveraged against you. At the very least, authorities will likely obtain a search warrant and systematically attempt to destroy your life.
- yieldcrv 3y ago
  Al Capone would have passed KYC everywhere as a US citizen And Al Capone could have used a non-profit as they are tax exempt, where money laundering - the crime - is not possible because there are potentially no taxes to report that's the system

weare138 3y ago

The problem is policies like KYC are often just corporate CYA (cover your ass) policies. Making the security measures as overt as possible gives corporations plausible deniability.

lottin 3y ago

The purpose of KYC isn't just to combat terrorism and financial crime, but also to protect businesses from the actions of unscrupulous individuals, which is common in low-trust societies. As Western society transitions from high-trust to low-trust, I predict KYC will only become more widespread.

apimade 3y ago

How do you handle customer password resets when an email service provider locks them out? Do you just keep the money? Or do you send it to the government who keeps it, because they can’t assign it to a person? KYC is a speed-bump for criminals, yes. But it’s also the only way to support the finance system for regular people. What happens when you have a financial system where there is no people or traceability tied to funds? You know the answer, it’s a loaded question.

crtasm 3y ago
Send $1 from a previously used payment account/card?
- apimade 3y ago
  At that point you're effectively delegating KYC through Visa/Mastercard who will run KYC processes. It also ignores scenarios where multiple things are stolen at once (eg malware, cons, etc).
  - crtasm 3y ago
    I can't think of a type of online business that stores money but doesn't take payments from bands/credit cards/paypal/etc. ?

deleted 3y ago

[deleted]

tjscott 3y ago

A lot of the usual misconceptions about KYC in here (that you need ID, or how the government insists KYC is implemented). I find Patrick McKenzie’s (patio11) deep dive into KYC [1] useful to understand more of why KYC exists and what is and isn’t in the law. 1. https://www.bitsaboutmoney.com/archive/kyc-and-aml-beyond-the-acronyms/ https://www.bitsaboutmoney.com/archive/kyc-and-aml-beyond-th...

dangus 3y ago

I don’t understand the issue here. It seems like various KYC regulations are the status quo. Is there a specific bill or proposal the article is against? That was left totally unclear. I don’t think tin foil hat shout into the clouds articles are very useful. Is the author an expert on money laundering or organized crime? Give me some reasons that aren’t just soap box speeches about freedom. Finally, I think that it’s pretty obvious how basic identity regulations can work. If a bar has an ID scanner that accesses a state database to look up your picture on file that can trivially defeat a fake ID. If a car dealership does the same they can prevent selling a car to someone who isn’t licensed to drive. Seems pretty normal to me.

FooBarBizBazz 3y ago

KYC effectively means that if you don't own property and don't pay rent, then you're not a full legal person. You need an address, and a cheap P.O. box won't cut it. Need to live in your car? Want to live in your RV or boat? Planning on selling everything and backpacking around? Good luck registering for a driver's license or a checking account.

jqpabc123 3y ago

Laws can be circumvented --- therefore, laws are useless??? This line of reasoning is highly suspect --- particularly when based on assumptions without concrete supporting evidence.