KYC, Bitcoin and Failed AML Policies

[Webster]

Bitcoin Magazine: KYC, BITCOIN, AND THE FAILED HOPES OF AML POLICIES: PRESERVING INDIVIDUAL FREEDOM

For the past decade, the abbreviations AML and KYC have become an inextricable part of our lives. To help law enforcement track illegal funds, an increasingly constraining set of anti-money-laundering measures is being implemented across the globe. For the past two decades, it has involved extensive know-your-customer obligations for financial institutions, forced to check their clients’ identities, backgrounds, and the nature of their activities. This system, based on surveillance and the presumption of guilt, has helped the global financial system to efficiently fight criminals by cutting off their money flows.

Or has it really?

Real-life numbers tell a different story. Several independent studies have found that AML and KYC policies enable the authorities to recover less than 0.1% of criminal funds. AML efforts cost a hundred times these amounts, but more importantly, they start to threaten our basic right to privacy.

The instances of absurd demands, like the one of a French man asked to justify the origin of €0.66 he wanted to deposit, are hardly raising any eyebrows anymore. Regulators face this ridicule without blinking, all while journalists and whistleblowers continue to expose billions of dollars laundered at the highest levels of the same institutions that put their regular clients through a bureaucratic nightmare.

This suggests that sacrificing our right to privacy may not be justified by the results.

The blockchain emerging as a free value-transferring system, as opposed to the KYC-gated fiat, has given hope to many personal freedom advocates. However, the regulators’ response was to try and integrate both the acts of buying and transferring crypto into the current AML processes.

Does it mean that the blockchain has been tamed, with both the entrance and the exit sealed by the AML regulation?

Luckily, not yet. Or at least, not in every jurisdiction. For example, Switzerland, famous for its practical common sense, often allows companies to define their own risk exposure. This means that people can buy reasonable amounts of crypto without KYC.

The Swiss example could prove valuable in stopping global AML practices from spiralling out of control and bringing a surveillance state upon the world that used to be known as “free”. It is worth taking a closer look at, but first, let’s see why the traditional AML approach is failing.

https://bitcoinmagazine.com/culture/kyc-bitcoin-and-the-failed-hopes-of-aml-policies-preserving-individual-freedom

https://www.capital.fr/entreprises-marches/il-depose-moins-dun-euro-a-la-banque-on-lui-demande-lorigine-de-ses-fonds-1407713

 

[magnus2022]

The truth of the matter is that governments want to control our life, resources and time. If someone can control your resources, yoy will forever be obedient to him and do his bidding. Government officials use fraud as a excuse to keep the masses on check. Cryptocurrency is a game changer and it gives you the real power over your wealth.

 

[neku]

One of the largest crypto exchanges in India is using the anti money laundering provisions to cheat some customers of a small amount. They have still not credited $6 in my account after more than 70 days, asking for national id.