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It's worth noting that this offloads the KYC/AML component to someone else down the road, but doesn't protect you from possible money laundering risk (e.g., you
by bastawhiz 2mo ago
It's worth noting that this offloads the KYC/AML component to someone else down the road, but doesn't protect you from possible money laundering risk (e.g., you send USDC to a sanctioned individual who launders it into monero or something else). I'm no lawyer but I did work on Stripe Connect's compliance pieces for five years and I would NOT take the risk of (as a business) sending money to USDC addresses without actually verifying identities.
It also doesn't offer you protection against fraud (which is a huge problem that marketplaces face).
Frankly the missing piece to this is a real, actual identity verification component. If you're not checking identities against sanctions lists at the absolute minimum, you're not doing your due diligence. I wouldn't take that risk. The last thing you need is to be on the receiving end of a US Treasury inquiry.
- tinyprojects 2mo agoAppreciate you raising this, especially given your Connect experience. This is a fair concern. Zoneless does verify the identity of payout recipients through Didit, and marketplaces can require KYC before the first payout. We also have support for blocking OFAC-listed wallet addresses, and also have additional checks to flag suspicious behaviour. I agree that KYC doesn't eliminate marketplace fraud, though. That's true with Stripe Connect too; Stripe explicitly leaves platforms responsible for monitoring and preventing fraudulent activity even though it handles KYC and provides risk tooling. I think the area I could make much clearer in the docs is the distinction between identity verification, sanctions screening, and marketplace fraud prevention.