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To be fair so does most of the traditional banking system.

delusional 2y ago
This was the case maybe 20 years ago, but modern anti money laundering has moved the needle significantly in recent years. Where I live there are now rather strict limits on what consumers can do without subjugating themselves to what's called "Due-diligence". Which is in fact about NOT assuming cleanliness. Know You Customer is all about not blindly assuming your counterparty is honest.
- jorvi 2y ago
  Yup. This also why people should only use fintech banks (Revolut, N26, Bunq, etc) as a checking account and should keep the bulk of their money elsewhere. Because of the relatively low-friction signup process, fintech banks are extremely trigger happy with account locks, and at that point you have to go through their permanently-overloaded customer service to get your money transferred to another bank, a process that might take months if you’re unlucky.
  - manquer 2y ago
    Also don’t keep money that that you cannot afford to miss in fintech because they are not banks at all. The FDIC insured bank which actually has money when using these apps is somewhere in the backend and you get stuff like the synapse bankruptcy[1] [1] https://apnews.com/article/synapse-evolve-bank-fintech-accounts-frozen-07ecb45f807a8114cac7438e7a66b512 https://apnews.com/article/synapse-evolve-bank-fintech-accou...
    - jorvi 2y ago
      That’s just wrong. Revolut, N26 and Bunq all have banking licenses, which means funds are insured to €100 000, €200 000 if it’s a shared account. It’s not that they “steal” your money, but unlike your local bank, their customer service is much less tactile which means that if you’re up shit’s creek getting out if it gets much harder.
calpaterson 2y ago
The financial system runs on a soft-whitelist system with extra checking and a shadow banning system. This is why everyone is always asking everyone to demonstrate the sources of funds in finance. Obviously it is not 100% effective, but it is somewhat effective. You cannot just jog in from Iran and enroll as a JP Morgan client
- CaptainOfCoit 2y ago
  > soft-whitelist system A whitelist/allowlist is a system that defaults to rejecting everything, but allow someone to override that rejection. A blacklist/denylist is a system that defaults to allowing everything, but can on-demand block/deny something. Banking system for individuals today mostly have a blacklist/denylist for the common use case. Walk into a bank and ask to open an account, and they'll most likely allow you. If you manage to trip up any alerts (big deposits for example), they'll ask you for more info, citing KYC/AML for the reason why. > This is why everyone is always asking everyone to demonstrate the sources of funds in finance. This usually happen after the funds have touched some account you own, hence it's a blacklist system. A whitelist system wouldn't allow you to deposit those funds until after you got verified somehow.

This was the case maybe 20 years ago, but modern anti money laundering has moved the needle significantly in recent years. Where I live there are now rather strict limits on what consumers can do without subjugating themselves to what's called "Due-diligence". Which is in fact about NOT assuming cleanliness. Know You Customer is all about not blindly assuming your counterparty is honest.

jorvi 2y ago
Yup. This also why people should only use fintech banks (Revolut, N26, Bunq, etc) as a checking account and should keep the bulk of their money elsewhere. Because of the relatively low-friction signup process, fintech banks are extremely trigger happy with account locks, and at that point you have to go through their permanently-overloaded customer service to get your money transferred to another bank, a process that might take months if you’re unlucky.
- manquer 2y ago
  Also don’t keep money that that you cannot afford to miss in fintech because they are not banks at all. The FDIC insured bank which actually has money when using these apps is somewhere in the backend and you get stuff like the synapse bankruptcy[1] [1] https://apnews.com/article/synapse-evolve-bank-fintech-accounts-frozen-07ecb45f807a8114cac7438e7a66b512 https://apnews.com/article/synapse-evolve-bank-fintech-accou...
  - jorvi 2y ago
    That’s just wrong. Revolut, N26 and Bunq all have banking licenses, which means funds are insured to €100 000, €200 000 if it’s a shared account. It’s not that they “steal” your money, but unlike your local bank, their customer service is much less tactile which means that if you’re up shit’s creek getting out if it gets much harder.

calpaterson 2y ago

The financial system runs on a soft-whitelist system with extra checking and a shadow banning system. This is why everyone is always asking everyone to demonstrate the sources of funds in finance. Obviously it is not 100% effective, but it is somewhat effective. You cannot just jog in from Iran and enroll as a JP Morgan client

CaptainOfCoit 2y ago
> soft-whitelist system A whitelist/allowlist is a system that defaults to rejecting everything, but allow someone to override that rejection. A blacklist/denylist is a system that defaults to allowing everything, but can on-demand block/deny something. Banking system for individuals today mostly have a blacklist/denylist for the common use case. Walk into a bank and ask to open an account, and they'll most likely allow you. If you manage to trip up any alerts (big deposits for example), they'll ask you for more info, citing KYC/AML for the reason why. > This is why everyone is always asking everyone to demonstrate the sources of funds in finance. This usually happen after the funds have touched some account you own, hence it's a blacklist system. A whitelist system wouldn't allow you to deposit those funds until after you got verified somehow.