Topic: AML/KYC Explained - page 14. (Read 479726 times)

I am not making a statement one way or another about gun control, just using it as an example.  Gun control rules create a set of circumstances that means law abiding citizens have fewer guns and criminals have more. The financial institutions are agents of the government and AML/KYC is one such rods handed to them to beat people into line, so that a tab is kept on every of their dealings for scrutiny anytime

I think you are in the know of how financial institution works and talk candid - the combination doesn't come easy. I am related to financial institutes in Australia and I'm a bitcoin early-adopter/supporter/consultant/journalist. If you take out large amounts of cash, they report on you also.  Account mangers have to audit any flagged account, based on a set of hush hush rules, and report. Like if you deposit as little as 2000.00 in cash, if that's not normal for that account

Several months ago I made certain that some projects that need verification are very uncertain. On the question to the manager: "So, when I will receive my tokens?" I've got an answer: "We don't have official announcement yet." A lot of people I spoke with believe that project failed. So KYC doesn't always guaranty reliability.

I justed learned the AML procedure from you article, thanks for that. I really like and support KYC process. This is a nightmare for the multi account owners. The best parf of this enable a fair bounty distribution.

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What about this?!

https://www.civic.com/
https://www.icopass.id/

Nope, this wouldn't function. Not from the personal data protection perspective, at least not in Europe.
These are all your personal data and they can't be shared and distributed without your explicite consent and used for exactly defined purpose. The regulation is rather strict concerning that issue.

The subject is really interesting, but I think it should improve some aspects, or possibly they are not very well explained and people like me do not understand well because we do not live in an environment where that is imagined feasible.

Ya, Selfkey is building decentralized platform to do KYC/ID without a need to send your docs over the network.

This is all amazing guys but why KYC/AML is still so centralized? I mean common, blockchain is used everywhere and still we have to send over Internet our passports, driving licenses, utility bills, etc. Any ideas how to  get around it? There must a company to offer decentralized KYC services.

KYC means know your consuser.it is a effective way of getting tokens or coins. Kyc is an anti Cheater activities in AIRDROP and bounties.

The set of procedures, rules and regulations which are designed with a view to curtail the money laundering or criminal use of the financial institutions is called Anti Money laundering process. Many measures are developed across the globe to curtail money laundering and combating terrorist financing. While KYC is one of a anti money laundering procedure or a small part of AML and Combating Financing terrorism (CFT).

Know Your Customer or (KYC) is a requirement in the process of adhering to the preventitive measures necessary to monitor money laundering techniques used by suspected parties. It involves questions by a banking officer or principal of a firm which allows the officer to ascertain the primary source of funds which are being used to carryout a financial transaction.
The Financial Industry Regulatory Authority (FINRA)
is responsible for making sure all financial firms adhere to the “Bank Secrecy Act.” The Bank Secrecy Act has implementing regulations which amount to “Anti-Money Laundering” (AML) rules. The AML rules are in place to help
protect and report suspicious activity regarding financial transactions. It mainly focuses on those actions which predicate money laundering, terrorist funding, market manipulation and securities fraud.

Thanks - great write-up. Interesting how this applies to token sales rather than exchanges/other services. Exchanges are dealing directly with fiat, so it makes sense for AML/KYC.

In the case of a token sale, surely the seller is basically selling a digital asset that has some future utility? Furthermore tokens are almost always bought with other cryptocurrencies, not fiat, so why does AML/KYC apply to token sales? It seems strange to say that a token is not an investment/security and then apply the kind of controls an investment/security has to it?

If I buy an ebook (digital asset) and even pay with fiat, there are no such checks. So why are these checks being applied to token sales?

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I fully agree with you and my experiences relate. I am also trying to roll out an ICO that will make decentralized ID's possible. So in essence you would only need to perform KYC once, and as soon as all checks are done - your documents and the like are deleted, which means there will be no centralized storage of ID or data. If security is breached - intruders will have access to nothing but the blockchain TXs (elaborated on further below) which is futile as it would already be in the public domain. The onus would rest on you though to ensure that your device (PC/tablet/smartphone) is not vulnerable.

* If your (hypothetical) address is: 1234 Crypto Street, Cryptoville, Cryptania
* Your date of birth (derived from ID/SSN or equivalent) is: 01/01/1980

Any other entity that would require KYC should only know that you are from Cryptoville, Cryptania (street address should not be necessary) and that you are 38 years of age - no "specific" info will be divulged. We would simulanteously check if you are on any PEP/terrorist/other crime related lists and have just an atomic value of Yes or No. Once KYC is successful - we issue a cryptographic identity that can be used any other place where KYC is required as we would "vouch" for the legitimacy of your identity. Even further should an entity need to access your profile - they would need to have undergone KYC in the first place, and then you can either accept/reject the access to your info. These requests will be written to a blockchain so that there is transparency and a proper audit trail. This is the jist of the propsed system - I have omitted the complex cryptography and smart contracts behind the concept.

Hopefully the crypto community will see the value behind this venture and support us so that it can be implemented successfully.

If we being very sincere with ourselves and logical, the KYC/AML request are a necessity in today world, because of the reasons clearly stated. Its a fact that there is terrorism financing, human trafficking and sex slaves, drug dealing etc. If we are good people at heart, I believe that we would like all these stuff to be stopped or eradicated totally, but now cryptos anonymity has only created a big avenue for these things to thrive.

That being said, I don't like my personal data in hands of millions of random people and companies. Already we are suffering from "targeted adverts" to a phones and email, after webiste have promised not to share our personal data. So yea, I can't really trust the KYC/AML words for it. So I guess is a tough one, "universal gain vs. personal gain". A better world with more transparent dealings or a worse world but you (we) the individuals safe in our own small corner - in the end the chaos will reach your doorstep.

What i'd love the most genius cryptographers to come up with is a system where we keep our anonymity, but we can meet the requirements of these KYC/AML to ensure we are not doing illegal stuff... May The Force BE With Them.

Notice Binance not on the list of KML compliant exchanges. Makes sense considering recent events.

It appears that AML/KYC are for business-as-usual type of solutions. The true decentralized and open blockchain do not require any of the KYC stuff.