There’s a Huge Opportunity for Everyone in Crypto, It’s Called KYC/AML
Bruce Silcoff is CEO of Shyft in Toronto and is focused on developing a block-chain-based solution for digital ID and KYC / AML processes.
It is easy to ask about the need for rigorous know-how customers (KYC) and anti-money laundering (AML) controls as Edin Yago did in the recent CoinDesk op-ed.
Who likes increased complexity and compliance costs? Who can not access basic financial services, but who is excited about giving up personal information to open a wallet?
Deduplication in multiple centralized siled databases raises the basic risk of large and small organizations, disrupts basic operations, and gives pleasure to anybody.
KYC / AML is an easy goal for critics like Yago. They are also directly contradictory to the two most important aspects of cryptocurrency, privacy and disarmament, because these practices effectively influence global surveillance. Not only can KYC / AML infringe on the user's right to privacy, you can see that the "Big Brother" surveillance practice has begun. it's over.
So, should we abolish the regulations? Do you go down to KYC / AML? It is not that fast.
We saw the alternative that there was no regulation, and we saw what the block-chain company meant. Silk Road The aftershock has slowed innovation and effectively legalized space because the block chief has been associated with criminal activity. Regulatory uncertainty meant that early adopters had to take a tremendous personal and financial risk to pack the roads that we can travel today for many years.
More importantly, when none of us sit at the table and the future of the ecosystem is in crisis, there is more doubt and regulation becomes more difficult, so we have to take responsibility if we make money. I do not like the results.
New Privacy Standards
Although KYC / AML procedures and regulations may interfere with the protection of your personal information, this does not mean that you should.
A more consistent approach to the basic principles of cryptocurrencies is to place too much data in the hands of a middle-tier provider (or a small number of providers) to satisfy the KYC requirements and not to exploit or open them No abuse by catastrophic destruction.
In fact, KYC practices are rapidly emerging as a gold regulator of regulatory agencies trying to hinder money laundering in the cryptocurrency ecosystem.
The cryptocurrency ecosystem needs to develop solutions that do not obey the promises of technology to perform these practices.
If our common goal is to advance public adoption, the block-chain and cryptography companies must work closely with regulators to create new ways to solve big problems. In short, we need to build better technology.
Block chaining and strong encryption have enabled multi-stakeholder use cases that have not been technologically feasible in the past few years, and KYC / AML is a new exciting new way to rethink and maintain the original intent to suppress malicious actors and improve protocols Provide opportunities.
The current KYC / AML infrastructure reflects the guidance implemented by centralized finance companies around the world. Just as traditional financial institutions require due diligence on prospects, decryption companies use KYC / AML to collect personally identifiable information about an individual before creating a new password wallet, making a peer-to-peer loan, or transferring money across borders. It depends. Buy and sell passwords on the exchange. If a crime has been committed, this information can be used to pinpoint the offender and take appropriate action if necessary.
However, there is no risk of data corruption or extreme expense in the identity verification.
By creating robust cryptography and decentralization to the current system and processes, you can dramatically improve KYC / AML processing from a privacy and security perspective by creating protocol-level encryption rails. Remove. on the mass adoption of cryptocurrencies and blockchain.
The dramatic decline in costs means that KYC / AML regulations are strong and efficient, which means more businesses can innovate and thrive. We are already paying attention to progressive jurisdictions such as Bermuda, Mauritius and Australia, and are turning to block chaining and cryptographic space for legislative collaboration.
This levelizes the stadiums for billions of people without traditional legal meanings because it helps the people to evaluate their ability to repay loans, credit verification, transactions and their ability to participate in the global economy. Traditional banking is a viable option because there is usually a new way to build and establish trust that does not give you full control over your personal data. Finally, imagine the freedom that innovators can create once the barriers disappear as the world economy becomes more difficult to compete with KYC / AML compliance costs.
This is my team and other notable organizations trying to show the importance of important initiatives in the KYC / AML and global cryptocurrency community. In other words, it demonstrates that you can not prevent encryption innovation through obvious use cases.
Image through Unsplash.
CoinDesk, a leader in block-chain news, is a media outlet that pursues the highest standards of journalism and adheres to strict editorial policies. CoinDesk is an independent operating subsidiary of the Digital Currency Group, which invests in cryptocurrencies and block-chain startups.
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