Jul 21, 2024, 08:42 PM


Stay tuned as we migrate data from our old forum !

KYC - Know Your Client ?

Started by trilight, Nov 14, 2022, 06:52 PM

Previous topic - Next topic


Nov 14, 2022, 06:52 PM Last Edit: Jun 26, 2024, 04:11 PM by trilight
Remember the days when you could buy, relatively easy, cryptocurrencies anonymously? As of 2022, only in some recesses of the web can you find such platforms, driven by an "unlawful" spirit. Its risky endeavor will soon cause its demise. Gone is the time when these were legal and it is only a matter of time before they disappear altogether. We are specifically talking about the more or less centralized platforms. Especially when trying to use your good ol'fashioned fiat currency to get some crypto of some sort. Why is that?   

KYC, or Know Your Customer.

KYC forms are documents you have to fill using your real identities in order to be granted access to cryptocurrency exchanges. The reason? "To protect our customers and follow legislation" as exchanges will write. In reality, they do this to protect themselves from lawmakers by shifting the responsibility to you, the customers, while acquiring a wealth of personal information at the same time. They say it is to prevent fraud and money laundering, them who were the first to abuse technology for their personal gains by corrupting cryptocurrency and making it into a financial tool to be exploited. Naturally, this is done at the expense of the rules meant to protect the masses through the obvious tax avoidance schemes put in place. The risk? To put it mildly: the original spirit of cryptocurrencies is under attack and that medium of exchange is becoming barely distinguishable from banknotes, following the same rules and constraints cypherpunks fled in the first place. And this is not the worst of it: your information is now in the hand of a third party for an indefinite duration, at the risk of being misused by them or, should enough time pass, being misused by someone else after the data breach that will inevitably happen, as data cannot be kept secure forever. In their flawed logic, the crimes of a few should lead to punishment for the many.

(De)centralization, swept away in one swift move, or not ?

KYC have become mandatory because of one of society's inherent flaw: we cannot trust everybody, we cannot trust nobody. Hence, the holders of powers, government and corporations, are putting themselves on the forefront as unique trusted parties, therefore allowed and entitled to holding your data. KYC is not dangerous nor even the root cause by itself, for it is only a method, but the flawed use of that method led to the current situation. This hyper-concentration of power and information in the hand of a few is itself a feedback loop, whereby power attracts power and weakness causes weakness. How ironic it is that the ones most likely to request a KYC to "prevent money laundering" are also the ones most likely to fraud themselves, bypassing the rules and perpetrating the loop. We are, crypto, is at a new crossroads where it is more important than ever to keep building a foundation where privacy and real decentralization is a priority.                     

What would be the world like if it was KYB or KYG, you guess ...

Small note; This was written before the events surrounding the collapse of FTX triggering crypto chaos and reminding us of the positive message what crypto always intended to do in the first place ...