KYC Laws - Reading Assignment

Read this article about KYC Laws, answer the questions and post your answers below:

  1. Who writes KYC/AML laws, and what is their “official” purpose?
  2. What type of information is usually collected for KYC compliance? (Hint: it’s not the government)
  3. Who is responsible for enforcing KYC compliance?
  4. How is KYC a threat to privacy? Who might gain access to what?
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  1. They are written by governments or state agencies. The purpose is officially to prevent money laundering. In realty the reason is to control the crypto market.
  2. Personal data, bank account, address, etc.
  3. The exchanges
  4. It is easy to keep track of whatever cryptos you buy, where you transfer them, etc. It is a way to connect your identity with BTC addresses.
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  1. Governments and state agencies
  2. All the personal data they can get from you.
  3. Exchanges
  4. They will then know what you invest in.
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  1. KYC/AML is written by the FATF and AMLD5 (goverments). The purpose is to stricter controls on buying and selling cryptocurrency, and increased compliance.
  2. for KYC compliance is usually collected: picture of their passport, a selfie, address, … as much as they can.
  3. responsible for enforcing KYC compliance are the exchanges.
  4. If you have ever used the KYC /AML process of the hacked crypto exchanges, YOUR PRIVACY IS COMPROMISED. … Also, anyone can use your leaked personal documents to open any fake account using your name and launder millions of dollars through fake crypto exchange accounts. (https://medium.com/@wilderko/how-does-kyc-aml-pose-a-serious-threat-to-your-privacy-and-should-not-be-used-at-all-88f7acd3f3b)
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Financial Action Task Force (FATF).

Personal Information.

The Exchanges.

It is a way to connect your identity to your crypto assets

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  1. Who writes KYC/AML laws, and what is their purpose?
    The goverments in each country, but general guidelines are issued by supranational entities like Financial Action Task Force (FATF).

  2. What type of information is usually collected for KYC compliance?
    National identification number and a proof of residence.

  3. Who is responsible for enforcing KYC compliance?
    Companies that want to operate in that jurisdiction.

  4. Explain how KYC is a threat to privacy.
    They can track you future financial activity if you do not follow privacy best pratices.

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  • Who writes KYC/AML laws, and what is their purpose?
    is written by the Financial Action Task Force and Anti-Money Laundering Directive.they aim at more Know Your Customer (KYC) enforcement, stricter controls on buying and selling cryptocurrency, and increased compliance

  • What type of information is usually collected for KYC compliance?
    picture of passport, a selfie, information about work, information about domicialiation, and all other types of data.

  • Who is responsible for enforcing KYC compliance?
    all companies that allows the trading and the movement of crypto with a certain grade of centralization.

  • Explain how KYC is a threat to privacy.
    As the article introduce, KYC is gonna just give complete access to anyone that can connect your name to your address, to about all the history of the movements that you acted on the blockchain, moreover, the biggest problems in my idea are encountered when there is a breach of the security of the organism that kept the KYC informations, who is the author of the attack owns the info of millions of users, could create any kind of safety danger and and lead at the creations of fake accounts for malicious use.

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  1. KYC and AML laws are written by institutions and governments to prevent financial risks, privacy issues and other illegal activites to run on the crypto environment.
  2. As mentioned in the article, KYC compliance requires users to provide pictures, personal information and other data. They are needed to allow identity verification as well as greater control over this kind of environment.
  3. Those organizations that collect the data, which usually means exchanges.
  4. Risks are both related to individual privacy and organization autonomy, because passing through KYC procedures require to provide the organization with specific information that could then be used “against” the provider.
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1. Who writes KYC/AML laws, and what is their purpose?
Goverments (FATF, EU), to stop money laundering. The also get more controll over the cryptocurrency.

2. What type of information is usually collected for KYC compliance?
Pictures of passports, selfie, information on where they work, adresses.
3. Who is responsible for enforcing KYC compliance?
The exchanges.
4. Explain how KYC is a threat to privacy.
It removes the anonymity from cryptocurrency. Information of your idenitity from a transactions are stored at centralised newtwork where goverments can observe your transactions and in the worst case scenario be hacked/leaked. So your transactions are no longer anonymous.

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  • Who writes KYC/AML laws, and what is their purpose?
    Financial Action Task Force (FATF) to stricter controls on buying and selling cryptocurrency, and increased compliance.

  • What type of information is usually collected for KYC compliance?
    Picture of their passport, a selfie, information about where they work, where they live, and all other types of data

  • Who is responsible for enforcing KYC compliance?
    European Union.

  • Explain how KYC is a threat to privacy.
    With every customer kyc the governments know what you buy, where you buy, the amount of crypto you have, from who you buy and can use this info against you or force taxes on you.

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#3 Have a look at previous answers :wink:

  1. They are written by government agencies and intended to prevent money laundering.
  2. Personal data, photo, address, bank account, etc.
  3. Companies involved in the trading or movement of money.
  4. It allows your financial activities to be tracked and presents another risk of your private information being exposed.
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  • Who writes KYC/AML laws, and what is their purpose?
    The Financial Action Task Force (FATF). Their purpose is to prevent money laundering/

  • What type of information is usually collected for KYC compliance?
    a picture of passport, a selfie, information about where you work, where you live, and all other types of data .

  • Who is responsible for enforcing KYC compliance?
    The exchanges.

  • Explain how KYC is a threat to privacy.
    All my private information is stored on the exchanges server. in case of a hack my privacy is compromised. The exchange might use my private info for other purposes without my consent.

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  1. Who writes KYC/AML laws, and what is their purpose?
    FATF Financial Action Task Force and governments per country. Their aim is Knowing who has what to see if everyone paid enough taxes related to their assets. Further anti-money laundry, tracking people who do maybe illegal things.

  2. What type of information is usually collected for KYC compliance?
    Identity information like passports, drive license, bank account numbers and the related public keys where an exchange send the bitcoin through.

  3. Who is responsible for enforcing KYC compliance?
    The exchanges

  4. Explain how KYC is a threat to privacy.
    When information comes in wrong hands it will make your life difficult. For example insurance companies could not accept you when you buy stuff because you have pain in your bag or when you buy cigarettes, even when it’s for somebody else.

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1. Who writes KYC/AML laws, and what is their purpose?

The article mentions a new law written by Financial Action Task Force (FATF), which if you look up in google you find. In their about page (https://www.fatf-gafi.org/about/) they define themselves as follows: “The Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog”.

In other words, governments and state agents write these laws.

They say that the purpose is to fight money laundering, but this is just an excuse, as terrorists sure use other channels then official exchanges. The goal is to control the system, block accounts, chase people and tax them.

2. What type of information is usually collected for KYC compliance?

Here the key information that they collect:

  • Identity of the person: first name, last name, birthdate, address
  • Passport, identity card or driving license and selfie of person holding the document
  • Provenance of funds (bank account statements, salary statements etc.)
  • Work related information (position, salary etc.)

3. Who is responsible for enforcing KYC compliance?

Exchanges enforce these laws, because if they are caught in not enforcing them they can get into trouble.

4. Explain how KYC is a threat to privacy.

First of all, we can’t be sure that our private and sensitive information is stored securely (if it’s compromised, criminals may use it to attack you directly or indirectly, by opening accounts using your name etc.). Second, we don’t know if exchanges will share that info with governments. E.g. coinbase was forced a few years ago to disclose with the U.S. taxman a list of their customers, because they wanted to punish them if they didn’t declare their crypto in the tax report.

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1. Who writes KYC/AML laws, and what is their purpose?
The Regulators in the EU, US and every different country. It depends on the jurisdiction.
2. What type of information is usually collected for KYC compliance?
Legal name, address, date of birth, ID pictures, even SSN
3. Who is responsible for enforcing KYC compliance?
The crypto exchanges.
4. Explain how KYC is a threat to privacy.
Your identity is connected to your transactions.

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  1. Governments make those compliance laws. The purpose stated is to prevent criminal activity. The irony is it implies assumption of guilt of individuals in nations where the laws state innocent till proven guilty. Theoretically people should be presumed innocent. The laws also imply that the conviction of criminal minority is more important then the rights and freedoms of the innocent majority.

2.Name, Address, Photograph

  1. Anyone providing services to store or trade funds. Possibly even those how receive funds for payments.

  2. The biggest threat to privacy is exchanges have habit of getting hacked. So identity theft is a real concern. Besides that the the ability to see on ramp and off ramp transaction makes it likely all transactions can be traced to you.

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  1. Who writes KYC/AML laws, and what is their purpose?
    Governments and regulators write KYC/AML laws. Their purpose is to control ownership of Bitcoin assets and transactions to protect the world against bad guys using BTC for money laundering and terrorism.

  2. What type of information is usually collected for KYC compliance?
    Passport, information about work and live place, etc.

  3. Who is responsible for enforcing KYC compliance?
    Providers of crypto service (exchanges, custodial wallets, etc.) will need to comply with the KYC/AML rules dictated governments.

  4. Explain how KYC is a threat to privacy.
    With KYC we lose the anonymity of transactions and we get also exposed to some hacks to the parties holding our identities, that may be stolen.

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  1. Who writes KYC/AML laws, and what is their purpose?
    -> Government / Regulators. Recording of payment flows and user identities
  2. What type of information is usually collected for KYC compliance?
    -> ID or Passport with Name, Adresses, Birthday
  3. Who is responsible for enforcing KYC compliance?
    -> Exchange
  4. Explain how KYC is a threat to privacy.
    -> Connection of transaction to your ID
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  1. The Financial Action Task Force (FATF) issued strict new global standards for crypto assets. The upshot of this is more Know Your Customer (KYC) enforcement, stricter controls on buying and selling cryptocurrency, and increased compliance.
  2. Same information as when you try and open a bank account.
  3. States authorities around the globe.
  4. Because you need to give information to exchanges as you would normally do to a bank.
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