AML/KYC Explained

[CDPromoSales]

I'm always weary of any regulations about bitcoin. Nonetheless, it is nice to have a few regulated companies to buy and sell btc/usd from.

Of course, nothing is going to prevent a mt. gox like situation though.

I think AML/KYC are just excuses to keep the smaller ventures away from the main competition (monopoly anyone?). At times the rules and their rigidity can mean hindrance more than facilitating. Most times they just make it harder than ease your transactions.

its really just banks piling on imo.

[hardpantech]

Assume that restrictions for any Bitcoin to National Currency exchange may become more restrictive at any time in the future.

What an extraordinarily useful "Heads-Up," and seriously so.

I certainly wouldn't want to muddy up the discussion with any too off-hand speculation, but if one may endeavor to extrapolate as towards any application of this knowledge: In noticing that each transaction e.g at Kraken might be, to any extent, publicly - though anonymously - advertised at least via the Kraken web API -- perhaps, with some exceptions?* -- and there may be some fairly novel, if not altogether technical things found online as with regards to any manner of a system of material provenance, ostensibly applicable as towards a manner of a data forensics, namely as among developments of a sort of a Semantic Web standards-making community -- e.g the PROV-O ontology developed in the W3C standards track -- moreover, in considering the essentially transparent though immediately anonymous nature of transactions onto the Blockchain, in short, I believe that the Blockchain is already doing a lot of the book-keeping, itself? Sure, it doesn't all bridge the gap onto individual identity, but I believe it's not as though anyone was trying to keep any Bitcoin transactions "Secret" altogether?

I certainly wouldn't want it to seem like a "Buzkill" that so many transactions on a Blockchain may be already publicly advertised - as may be necessary to the authentication algorithms applied throughout the numerous finite state machines that make up the quintessential "Bitcoin System". I believe it could pose a concern as with regards to data mining, as such, but hopefully such a concern may never develop too tall of a shadow in the Bitcoin community?

Considering that an AML/KYC burden must be legally and somehow shared as a responsibility, shared as by any hypothetical Bitcoin exchange broker extending of any single Bitcoin exchange's own material services, I would like to speculate that it could be - in any semantics - leveraged onto the trust provided/developed by the individual Bitcoin exchange institution? There are some concepts of a Web of Trust, developed in some IS/IT practices?

I believe that the initial post serves to elucidate so much of a legal side of running a formal, commercial service onto a Blockchain. Certainly, it's not all about Unicorns and Silk Superhighways, LoL?

* Maybe not as much publicly available about the "Dark" Bitcoin/altcoin currencies though?

[Slowturtleinc]

When you fill out one of these forms for KYC how long does it take till the government has a copy?
Just trying to figure out if they file the information or actually send it forward. Hoping its one of those issues where people just make sure they file the information in case of audit but something tells me they send any transaction over 10K forward for further scrutiny.

[BunkerChain.Labs.Inc.]

I agree that a lot of the AML KYC stuff can sometimes seem pointless. It is like an old system trying to keep track of everyone.

Did anybody catch the article about how 90% of the Bitcoin companies are meaningless because all of them are subject to AML/KYC?

https://news.bitcoin.com/tone-vays-90-bitcoin-cos-meaningless/

This coming from a Wall Street guy too.

What you think? Do we rage against the machine? Or play Trojan horse?

[zhangweiwu]

it's 11 million per breach here in Australia for a corporation and a single transaction can involve multiple breaches.

Hi repentance: I think you are in the know of how financial institution works and talk candid - the combination doesn't come easy. I am related to financial institutes in Australia and I'm a bitcoin early-adopter/supporter/consultant/journalist (google me Weiwu Zhang). I wish to get in touch with you:) You blocks private messages so I am trying my luck with a pubic post.

[Btcoiner1]

Thanks for your post, Maged. I'm curious how KYC/AML regulations come into play for Bitcoin traders on LocalBitcoins/Paxful. Are there any existing threads that provide more information about what a trader has to go through to legally buy and sell Bitcoins on LocalBitcoin/Paxful?

I'm contemplating getting involved in buying and selling Bitcoins to earn profit, and I'd like to get an idea of how many hoops the high-volume sellers I see on LocalBitcoins have to go through. I've done a few trades where I sell bitcoins for cash, and it doesn't seem like the buyers collect much information or have an extensive process for verification.


Edit: Also, is there an easy way to see the latest post in threads that I've posted in? On other forums, you can alter the settings to subscribe you to a thread when you post, then you can easily be directly to the new posts, so you can easily keep up with the thread.

This is one of the largest forums I've been a part of, and I'm noticing myself getting lost in trying to keep up with conversations.

Thanks in advance to anyone who can help me out! 

[kellah]

Nothing is going to prevent a mt. gox like situation though. It depends on your risk profile if you get into trouble or not. I'm contemplating getting involved in buying and selling Bitcoins to earn profit. This is one of the largest forums I've been a part of. I hope this would be a good experience for me.

[bjman]

Sorry, sir.  Our rules state that a utility bill is required.  We will not be able to allow you to transfer your money back to your account from the exchange.  Fuck off, money laundering scum.

You understand the system well. I feel bad for your situation but the fact is that those exchanges don't really care enough to bother with customers in your situation.

BJ

[reb0rn21]

KYC/AML is something you can not avoid or its more and more hard

I personally have nothing against it, but my biggest concerns is privacy and security of that organization and firm that hold and keep my data
so far many hacked or leaked aml data, even banks here where I am from have lazy security, last month they trowed out old visa debit cards in a trash bin

Its a disaster, and insane FBI/goverment/USA they don`t care at all, they are more and more squizing for more info

[virasog]

When you fill out one of these forms for KYC how long does it take till the government has a copy?
Just trying to figure out if they file the information or actually send it forward. Hoping its one of those issues where people just make sure they file the information in case of audit but something tells me they send any transaction over 10K forward for further scrutiny.

Very nicely put together and explained.  This is the only problem as I see it. 

[virasog]

Not a problem with your thread, just a statement on the rule system.  I have been to the silk road type sites on the DW. 

[BitcoinPC]

AML/KYC U.S. laws..

I guess I should point out some things I know about this..

Banks have software that run on all accounts, looking for structuring.. I.e cash deposit for a certain amounts, over a period of time. Or large cash deposits through multiple, atms etc.   This flags accounts..   Also tellers who think your up to something, are also compelled to report on you. If you take out large amounts of cash, they report on you also.  Account mangers have to audit any flagged account, based on a set of hush hush rules, and report. Like if you deposit as little as 2000.00 in cash, if that's not normal for that account. They also have to report on certain amount's to the Irs. Which everyone thinks is only for 10k dollars, but there are different reports for like 5k, or smaller.  Once you've been flagged if I remember correctly, report's go to three types of agencies. Law enforcement, Homeland Security,and IRS.  



This is 1984 /Big brother in your face !

You can buy a person’s info, SSN and everything for $1. You can get nice copies of ID’s, SSN card and other stuff, all for the same person for under $10.  I don’t buy them, but I see them and most of those sellers have good feedback.

The sites put the frameworks up there to comply and really could not care about the purpose and only follow through to that point of continuing to do business.

[posternat]

AML/KYC U.S. laws..

I guess I should point out some things I know about this..

Banks have software that run on all accounts, looking for structuring.. I.e cash deposit for a certain amounts, over a period of time. Or large cash deposits through multiple, atms etc.   This flags accounts..   Also tellers who think your up to something, are also compelled to report on you. If you take out large amounts of cash, they report on you also.  Account mangers have to audit any flagged account, based on a set of hush hush rules, and report. Like if you deposit as little as 2000.00 in cash, if that's not normal for that account. They also have to report on certain amount's to the Irs. Which everyone thinks is only for 10k dollars, but there are different reports for like 5k, or smaller.  Once you've been flagged if I remember correctly, report's go to three types of agencies. Law enforcement, Homeland Security,and IRS.  



This is 1984 /Big brother in your face !

You can buy a person’s info, SSN and everything for $1. You can get nice copies of ID’s, SSN card and other stuff, all for the same person for under $10.  I don’t buy them, but I see them and most of those sellers have good feedback.

The sites put the frameworks up there to comply and really could not care about the purpose and only follow through to that point of continuing to do business.

So, if I were a criminal and wanted to launder money I am most likely aware of the same things that I just stated and producing the things that these exchanges and sites need would be a piece of cake.

[Sweetbtc]

If I were the type that needs to launder money I surely have the knowledge and tools to turn a simple ID picture into whatever is needed and things like utility bills, well there are ten electric companies here in Florida and if I cannot download a bill template online I would be amazed. 

[virasog]

Whether the sites care or not, it is the people that are breaking the laws that have the easiest access to the tools to meet almost any verification online. Why did my fake ID not work buying beer when I was 16?  Because I had to use it in person.  Online, people have the time to do what they need to get around the rules. 

[virasog]

I am not making a statement one way or another about gun control, just using it as an example.  Gun control rules create a set of circumstances that means law abiding citizens have fewer guns and criminals have more.  The thing about a criminal is that rules do not matter to them.

[buwaytress]

And here is the problem.  If you are a normal, 9-5, go home to the wife and kids guy, then you will probably fit the guidelines/expectations perfectly.

If you are (like me and many others), an expat in Asia, using bank accounts in very Third World countries, you are shit out of luck.  Can I get verified at Coinbase, Bitstamp or other major exchange?  Not likely.  I get forced to BTC-e because I don't fit the normal profile.

If I could get a KYC support person to listen to my story, and make some allowance for it, it would be easy.  Unfortunately, that would take 30 minutes which they don't want to give.  The questions usually go like this:

Why don't you have a US bank account?  Why do you have an account in Cambodia and Vietnam?

-- Because I haven't lived in the US in 8 years.  I split time between those countries.

I need a utility bill and a copy of your passport.

-- Here is the passport.  I don't have a utility bill in my name.  It is normal here that utility bills stay in the landlord's name.  Since mail is never actually delivered, I pick them up at the utility office anyway.  What can i give you instead? A copy of my lease, notarized?  A letter from the local police?  Name it.

Sorry, sir.  Our rules state that a utility bill is required.  We will not be able to allow you to transfer your money back to your account from the exchange.  Fuck off, money laundering scum.

Expected profiles and expected behavior suck.

I know what you mean. I live in third world country too. This KYC policy seems to mean that soon enough btc will no longer be anonymous, fine by me, if they are not requesting for utility bill to prove my address. I can give them a government ID though.

I am an Asian, normally working as an expat in the Global South (Africa, South Asia, Souteast Asian) and I can tell you that in the past 15 years, KYC efforts from online payment options have been a very difficult process for me.

They do range from the merely inconvenient to what I feel is outright scammy (I refer to old-timer Paypal who would happily take a deposit or payment with zero KYC, then force you to provide all manner of impossible documentations the moment you try to access your funds).

In the age of digital bills, providing a physical sample of address is tedious process. I can't bear to think of the amount of time and money spent trying to convince an online payer/exchanger that I'm not a scary fake guy trying to abscond with 20 USD.

Forget using VPNs or travelling... access your account from another IP and these guys close down on you. They need better algorithms for one, but before that they need to be upfront about KYC. Don't surprise clients.

And yes, a good point about anonymity. What happened to the spirit of crypto?

[Victorycoin]

The financial institutions are agents of the government and AML/KYC is one such rods handed to them to beat people into line, so that a tab is kept on every of their dealings for scrutiny anytime. It gives government power to poke nose into people's financial dealings and not in the least a form of protection for people finances. That is what they are missing out in bitcoin and ever since them, they have been visibly agitated and fighting hard to circumvent this freedom.

[iamTom123]

Reading the main post, I realized that here in my country many financial institutions are now implementing the same procedures. Even small pawnshops here have their own Know Your Pawner which is the same as KYC. I think this really has something to do with money laundering issues especially connected with drugs and terrorism, among many other factors.

[tradesup]

 What a contentious issue everyone!  And glad that there are so many interested bodies in learning more about protecting one's privacy and freedom of choice. 

   As mentioned by many other folks, the larger issue at hand is the freedom of choice to do what one wants with their employment earnings.  You can invest in almost anything in today's day and age, and try and earn a profit on it, including Tickle Me Elmo's Dolls, Barbie Dolls, and even Postage Stamps, Hockey Cards, or whatever you want.  The main idea is that you get to choose what you want to buy and collect without having people breathing down your neck about your own particular purchasing styles.

The problem with Crypto is that it got a bad rep early on by people who abused the system, but this also happens in the regular commercial banking industry, where big banks are continuously being caught in white-collar crime and fraud activities, so the issue is really a moot point.
 

Have you heard about Alcurex exchange? 

It is no AML/KYC and links to Poloniex, Bittrex, and offers high liquidity trading for US residents, and people all over the world. 

alcurex works for me