Topic: New KYC rules for crypto wallets (Read 528 times)

Even here in my country exchange wallet is regulated you need to follow their rules or your account will be blocked for that reason. I only use a wallet that ask for kyc for exchange use only in our local currency other wise I will never use it.  This is an easy way to convert our Bitcoin so we need to follow our government and wallet exchange rules as long as you know you never do anything bad you can free to use that wallet. But most of the time I stored my Bitcoin in a wallet that I have the phrase for my money security.

Its not wallet's choice, if the government implement it then wallet services from these country has to implement it or else they need to move to the different origin where such a rule doesn't exist. But the important fact is adding such a rule is not going to make any big change from the current condition. I think almost every exchanges implemented KYC for US-based customers so already they got data and people also willing to give it out to take the advantage of cryptos.

This is called structuring which is termed a suspicious activity and there are rules to prevent this by financial agencies. This rule is also being proposed along with the KYC regulation.

Rather than doing this, just avoid U.S based centralized exchanges and use peer-to-peer services which are not regulated.

Other dont want to bother to pass there KYC for the sake of anonymoty thats why theynonly choose those crypto wallets that doesnt require Ids and documents. Though under US regulations were being implemented about crypto wallets compliance with Kyc.

And other countries are also doing some changes like this too and it also somehow change the fact that bitcoin should stay anonymous but with these crypto exchanges with Kyc features, will it maintain that characteristics? It's probably not.

Same here.

I mean even if their motive is to secretly spy on those people who use Bitcoin then the number of them are just limited, only those who don't mind sharing their privacy, but just like what you have said, many would object to the KYC and would do it still anonymously by using different ways to outsmart them. Government agencies are creepy as hell when it comes to invading people's privacy in a low key way to hide their true intent.

Nevertheless, just spend less than the said amount limit for a transaction to avoid KYC. If its limit is per day or per month, then I guess KYC is going to be ignored.

anything that is implemented going forward will make no difference. think:

1 - exchanges have KYC

2 - to buy bitcoin one needs to go through KYC

3 - paypal and several centralized services are entering this market

we no longer have decentralization, so it doesn't make any difference what they want to implement

I think that such control by the state will not prevent many BTC users, because it does not apply to the whole world! DEX and anonymous cryptocurrencies can help in this situation!

I know that a lot of people may be thinking that $10,000 per day is a very high limit and they don't need to bother about it. But FinCen will progressively reduce these rates. If you look at the history, they had a similar limit initially for international transactions involving cryptocurrency. But then this limit was progressively brought down to $500 per day. I think that they will do the same with the crypto wallets as well.

It's maybe just the way you have worded things, but I reject the implication that by being privacy conscious I want to "hide" my money, since it plays back in to the often repeated and utterly nonsense "Nothing to hide, nothing to fear" argument. It's not that I have something to hide, but rather, I have nothing I want to share, be that with the government, the banks, third parties, or the public. The whole point of bitcoin is to not have third parties sticking their noses where they are not wanted and monitoring your entire financial history.

There are also a number of alternatives to OTC trading - decentralized exchanges like Bisq, Hodl Hodl, and LocalCryptos. Decentralized exchanges are steadily growing, in terms of numbers of exchanges, numbers of users, and volume of trades. It has never been easier to buy, sell, and trade bitcoin while completely avoiding KYC.

I never been a fan of KYC, it takes away the essence of privacy and being anonymous in using such crypto wallets. Much better to patronize decentralized wallet that have full control of the assets  and especially no kyc require and no limitations of sending assets. As bitcoin ideology we should be anonymous and free from control.

Let's actually talk about the logistics and picture this in action. It's easy and commonplace for governments to just talk about unfeasible things to stir up drama/fud. Going off a coindesk quote.



Transactions valued over 10,000 would be reported to FinCEN. Do you know how many transactions satisfy this? Exchanges deal with billions of transactions on a day to day basis, and this would involve a massive amount of manpower from the exchanges side, as well as the US government's side. We don't see the government auditing or investigating everyone, even though they could probably end up catching more people, and I doubt such a small and new section of the US government will have enough power to go through with such a move.

I share a similar view to Marta Belcher in regards to the actual impact it'll have on crypto-currencies, so I'll just insert her quote



I think there will be 2 major changes for bitcoin users in the US.

1. People using bitcoin as an investment tool, a way to diversify their portfolio and people who tick yes to every privacy statement google sends them will not care, to them, it's just a minor inconvenience.
2. Privacy-concerned people. People looking to hide money will now have very limited options when looking to cash out/buy into the market, mainly just OTC. It won't be a huge change overall, as most privacy-concerned users will likely stray away from exchanges anyway as they usually don't offer privacy and protection in comparison to other methods of holding/buying/selling.

Oh, and we'll see exchanges lose money. But, overall, people need to stop thinking bitcoin can make it mainstream without being regulated intensely. If cash was introduced right now, it would 100% be banned/heavily handicapped, and this applies to bitcoin as well.
 

Recently we have too many sites and exchanges forcing for KYC because its all happening due to some regional and countries policies as they are fighting against terrorism and money laundering which is creating some serious threats to this world but its really more hurting to our community as most of peoples want to live anonymous but now they have to face these shit rules recently we have too many problems due to localbitcoins.com coinbase.com and few more P2P sites and exchanges.

They will find hard looking for clients in that case. Only those that badly needed their service will accept their terms. We can always opt to find a crypto wallet which doesn't require the submission of your vital info. This is the contradiction why bitcoin is created in the first place.

Coinbase isn't a dex wallet, you need your email and password to sign into this wallet, yes KYC verifications from such crypto wallets doesn't sound wrong to me, why? It's fully centralized wallet, you aren't in total control of your assets you store on such coins, the fact is I don't or won't ever use such wallets in the first place

It seems that this case regarding KYC has a positive impact, to avoid security in transactions and but minus is the distrust of people to deposit their identity data for KYC to be a frightening thing, especially there is an issue of buying and selling identity making KYC sometimes raises pros and cons especially for large exchanges such as coinbase which is a very large trading volume and the assets held by the members are huge

I find it hilarious that they actually proposing to add KYC verification rule to a "Crypto" wallet.

The question in that case would be why use crypto if you're going to give out your personal documents anyway? other than maybe to gain some profit from holding or trading crypto...

Any wallet that implements such a thing as a mandatory rule will have close to no future, at least on a global level.

I thought that initially this news may bring some panic in the crypto community and we might see some dump in the prices. But there was no impact of this news which shows that bitcoin holders do not take this seriously.
Regulators want to control the bitcoin as they see it is going so much high and people putting their money in crypto but these regulators will fail to control the crypto currencies.

Basically, those who access their funds via exchanges are going to get affected by this, already there some threads created regarding this when a tweet from a famous person related to cryptocurrency. But no one is going to affect if they are having their funds in electrum like wallets and move it to another non-custodial wallet on their own or to someone. The effect on the prices can't be predicted by now itself when such a rule gets implemented but this is only going to affect people from the US where there are actually strict KYC policies exists.

We knew something like this was eventually coming, I will not be surprised if in the future governments develop their own wallets and that from that moment on you have to use it and the wallet contains only one address of which you never receive your private key.

Keep your eyes open gentlemen because I think a bunch of draconian laws are coming our way since governments cannot tolerate a form of money that is independent and which they do not have any hope of controlling, so once they see their economies falling and the price of bitcoin growing exponentially they will try to do everything to stop it.

We are always frightened with something, and precisely with what may be in the future.  However, in practice, this turns out to be not so scary, and from all the situations that have developed, there are always normal exit options.  And so far, the threat of severe restrictive measures comes mainly from the US government.  As a last resort, we will dispense with territories that are subject to US jurisdiction.  There will always be states and their offshore zones where the rules regarding cryptocurrency will not be so strict.  In general, it is necessary that these rules be adopted, and then we will discuss them.

There are many other ways to withdraw your crypto funds without undertaking kyc from such centralized exchange. Decentralized is what we liked the most, that's why we are going to use a decentralized exchange.

I think that kind of crypto exchange will be the eyes of the government towards their plan of putting tax in every crypto funds that we have.

This is another reason why centralized wallets and exchanges can't be trusted, I don't use coinbase wallet because I have no access to my private key, any wallet that requires email and password to login is plain centralized wallet, stay away from such wallets

Are they, though? I know this line is peddled by the media (the media which just happens to be bankrolled by the fiat banking system), but is there actually any hard evidence that vast sums of money are being laundered through bitcoin? The studies that I have seen regarding mixers have shown that a very small fraction of money passing through a mixer (somewhere in the region of 8%) is coming from darknet markets, hacks, or other illegal activity, which means that money laundering is only a fraction of a fraction of mixer traffic. Given that mixer traffic itself is only a fraction of bitcoin transactions, then money laundering truly is a tiny percentage. As always, the amount of money laundering being done through cash, or indeed, being done through the massive fiat banks we are trying to take back control from, dwarfs anything being done by bitcoin.

Not really. So for the sake of (hyperbolic) argument, let's say they coerce ThomasV in to forcing all new Electrum wallets to connect to a central server and refuse to allow users to create a wallet prior to creating KYC. One of two things would happen. Either someone else would simply fork the repo and continue developing Electrum without such ridiculous requirements, or the community would just abandon Electrum and use a different wallet.

The thing is, nothing about creating an address is top secret or even that complicated. A random number (your private key) and a few lines of code is sufficient to create an address. It is impossible to make KYC mandatory to create an address.

I wasn't disputing any of that, in fact in a previous response I already gave my take on what their intentions actually are.
And it obviously goes against the vision of Satoshi, I assumed that goes without saying.

I didn't read the PDF but would it be possible for them to  mandate the developers of  the wallet like electrum wallet and the likes that users has to submit KYC documents?

To the exchanges I guess we all have already grasp the idea that they really will ask these data eventually but I wouldn't expect that even the wallets like hardware wallets. This is really not half measures anymore.

This kind of limitation on KYC is already implemented on our local wallet coins.ph few many years ago so I will not be surprised to see this kind new law since its inevitable that they will regulate the amount of money the user can withdraw or deposit in crypto. This is there counter measure for money laundering since many money launderer are buying BTC over the counter then withdraw it to there bank. In that case, they can easily wash there money using crypto since wallets and banks don't limit the amount of widrawn/deposit.

From what I understand, govern's main concern is the use of decentralized wallets regarding the amounts the users utilize them for. But even if this is the case, or just the exchanges are forced to use "enhanced KYC" (so something additional to the KYC procedures used now), this can be a great benefit in the end: to be more precise, it is possible that more and more users to cease using centralized exchanges and stick to standalone, decentralized and anonymous wallets, as it was meant to be. Satoshi did not create Bitcoin for being speculated on exchanges.

If people will start using Bitcoin in an anonymous, decentralized, peer-to-peer manner, they won't have problems with the govern anymore. They'll take the power from the elites back to their hands, as Satoshi intended. And this could be a huge step toward crypto-anarchy, freedom and liberty!

Wallets like Coinbase and Xapo implemented KYC a few years back, i do not remember whether i voluntarily completed or they enforced as it happened a few years back and you should expect strict rules being implemented in every cryptocurrency related business and there are proposals from the EU to implement strict KYC by exchanges without the loophole to withdraw minimum amounts and we should expect the same in other cryptocurrency related business as well.

Obviously their intention is not for the good of all. Their intention is control the population and bring bitcoin under their control as much as possible, because it threatens the fiat banking system which is what their power depends on.

Which is an equally stupid position for them to try to enforce, since it is essentially impossible to prove if an address is custodial or non-custodial.

How? They want me to submit my master public key along with my ID documents so they know every address I generate? Fuck that. Anyone even considering allowing this to happen should just go back to fiat, since what you will be left with will be less private, more monitored, and depend on trusting more third parties than fiat will.

Not at the moment. The Bisq app isn't a standalone app at the moment - it simply links up to your computer software and provides notifications to your phone of trade activities, offers being accepted, etc.

Non custodial wallets is actually the target of the regulation, inorder for governments to be able to fully monitor transactions and money flow in cryptocurrencies.

From what I understand, they plan to use the exchanges not the wallets themselves. So if you have an account on a centralized exchange and intend to transfer bitcoins to a non custodial wallet, you would be put through 'enhanced KYC' for amounts above $3k and $10k. And the success of the transaction would depend on the financial regulations, so your funds would be effectively held till it's approved (for $10k+) and your non custodial wallets would be linked to your identity.

It seems the app needs to be paired with the desktop version for it to work. Is there any way one can use it without a PC?

KYC is not needed actually because bitcoin is independent and can stand alone even without regulations. However, due to some conflict of interest from the different countries around the world so they have to regulate this kind of system. I do not like what they are doing with bitcoin but if their intention is for the good of all then so be it. Hooefully, it will not really hurt the bitcoin system.

I don't know what detailed KYC can exchanges will implement with this so called enhance verification. Crypto enthusiast have been complying for years, even sending their personal info and pictures just to get verified.

There's still p2p exchanges out there like:

• https://hodlhodl.com/
• https://bisq.network/

KYC is a common thing for all exchanges but this new purposed rules says something more than the KYC for transactions above $10,000.

People want to use crypto to be anonymous. There is absolutely no point in taking documents for wallets. People will surely use the anonymous wallets in this case. How dumb this thing feels.

It's about surveillance. America, and most other western nations, are surveillance states. None of this is about prevent terrorists, catches criminals, protects the children, or any of the other nonsense they feed you when they are invading your freedoms. This is about surveillance. Just as they don't like people being able to communicate with each other privately which is why they try to ban encryption or force back doors in to software, and just as they don't like people being able to browse the internet privately which is why they record all your traffic and try to attack Tor, they definitely don't like people being able to spend or transfer money and buy thing privately without them being able to stick their noses in. Knowledge is power. Surveillance is control.

Enter Bisq. It is open source and freely distributed, just like bitcoin. Short of taking control of 51% of the hashrate (which would render bitcoin useless anyway) and censoring my transactions, they can't stop me trading peer to peer with another user.

All centralized exchanges ask for your KYC for years. What are you talking about...? Don't tell me you did not know that. The problem is not with centralized exchanges, but with independent, decentralized wallets. Govern's move regards these wallets, not the exchanges, as the exchanges already ask for KYC.

This is a quote from the article you mentioned in OP (boldface is mine):

But this will be forced to be implemented on coinbase and other regulatory exchanges. Anyone knows if binance would be liable to obey these new regulations ? 

I hope that most wallets will just ignore this. Non-custody wallets as ownr, exodus, coinomi, etc even dont know how much customers hodl there

In reality it won't matter since there are hundreds of wayout to turn your btc into fiat. In a way or other people do exchange bitcoin over p2p sites, national or international and can work it out.

If KYC stuff becomes stringent then there would be another companies who will offer KYC less withdrawl by using other countries rules and regulations. They will have more customer base and more income so they will surely do this for minimal fees.


This kind of group is increasing daily. People in my circle are actually showing up crypto currencies as their second income and they file taxes for it. This helping them to get more credibility in the banking system.

So yeah, there won't be much tension on the crypto system for sure.

This is one of the reasons I fail to understand the motive behind the proposal of these sort of regulations. It is just an attempt to track and monitor money flow in bitcoin rather than the publicized reason, which would be to prevent illegal usage of it, as there are many ways around these checks for someone who really wants to evade detection.

This singular action would likely not affect Bitcoin that much or at all, those who care a lot about their privacy would find ways around it and would not be so easily pushed out of the BTC space. Those who do not wouldn't find a problem with the regulation.
Although if the proposal gets approved and more countries possibly adopt it, the noose could get tighter around private transactions and decentralized exchanges could be targeted.

Monero still does the job. The only reason that they want KYC is to get a hold of those juicy tax money that they can get from this bitcoin hodlers, hopefully this KYC thing is just a US jurisdiction because I do care about my privacy and I am not surrendering it anytime soon. This is a Sisyphean effort because people will always find a loophole.

The very basis of Bitcoin is to provide a peer-to-peer system where centralised system are out of reach of the government and this just proves that. If such regulations ever comes a reality, the only thing it'll probably affect are US exchanges. Does it harm Bitcoin? Definitely not. Plenty of P2P exchanges and those based overseas as well.

For those who care less about privacy, they probably won't care. For those that want to steer away from government surveillance, there are plenty of easy and accessible ways to transact.

FinCEN proposes new KYC rules for crypto wallets. If this is implement in true sense then no one can withdraw more than 10,000$ from the wallets until a detailed verification is done and an enhanced KYC for up to 3000$.
I think these regulations will not be healthy for the market growth and also people will be hesitant to move their funds on exchanges like coinbase.