AML/KYC Explained

[qwertyqwerty]

It's precisely, also even you, me, or anybody can make an ICO and harvest for selling the information that we get by that, that's very bad for usual people

[1714783632]

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[1714783632]

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[markiz73]

I do not know what they say professors, experts and other assholes about the AML/KYC.
But in darknet now a lot of personal information is sold for 5-10 dollars per package, and wholesale is much cheaper, thanks to ICO. Now scammers are actively using it to get free profits.
Millions of packages of up-to-date personal information. Now on these bots you can draw up any activity.

[crypki21]

It might have some negative aspects as mentioned above. But in general, supposing good faith, KYC is a good thing in my view. It makes the whole ICO process more trustworthy and could lead to cut out suspicious scammers in a certain extent.

[f12345]

I believe most US based entities would have to check OFAC sanctions list compliance to make sure customer is not involved in illicit activities. Circle must already be compliant imho.

[ArunTomar]

what is KYC. Who  required KYC, how it can be done.
Very well explained in this post. Thanks for sharing this information

[JopToto]

In some sites, KYC is abusive. I mean websites without USD can avoid this method because we have already proove our ID when we have bougth Bitcoin before.

[whitewolfofcoinstreet]

KYC/AML does protect from fraud but mostly protects the companies who follow them from liability though some actually do use it to protect their clients. SOME...

[DonnieMitchel]

a very useful article for beginners

[darasinmi4show]

The kyc means know your costumers how kyc is very good if they can really work on the process of getting people verify in time. Also, many people now complaint great about lost of their reward in this process of kyc not get verify. Am little advice to them is that they should just work on the kyc process and things will get better on it.

[@DiscoveryIoT]

thanks 

[Anthrlive]

While already very overcomplicated, these systems don't seem to me like a very secure way to identify investors. There are still a dozen ways that some devious people can find loopholes in the system, and all the while people who are truly legit suffer constantly and have their credentials under scrutiny. Some countries and banks are totally out of luck, even though these people have no other options.
This situation really reminds me of the DRM (Digital Rights Management) implementation in videogames. For those who don't know, DRM is implemented to combat piracy, but instead it just makes it a little harder and takes a little more time for pirates to steal games. At the same time DRM makes many computers of legit users underperform or don't run the games altogether, which makes prospective buyers avoid games with DRM implemented. Don't you see the irony?

[Aurora2]

What is KYC ?

Know your customer (KYC) refers to due diligence activities that financial institutions and other regulated companies must perform to ascertain relevant information from their clients for the purpose of doing business with them. The term is also used to refer to the bank regulation which governs these activities. Know Your Customer processes are also employed by companies of all sizes for the purpose of ensuring their proposed agents', consultants' or distributors' anti-bribery compliance. Banks, insurers and export credit agencies are increasingly demanding that customers provide detailed anti-corruption due diligence information, to verify their probity and integrity.


Who has to enforce KYC ?

Know your customer (KYC) falls under the responsability of each financial institution and/or regulated company.

The regulations require these entities to adopt KYC procedures.  It assists them in knowing / understanding the customers and their financial dealings better to monitor their transactions for identification and prevention of suspicious transactions.


KYC Recommendations

KYC controls typically include the following:

- Collection and analysis of basic identity information (referred to in US regulations and practice a "Customer Identification Program" or CIP)
- Name matching against lists of known parties (such as "politically exposed person" or PEP)
- Determination of the customer's risk in terms of propensity to commit money laundering, terrorist finance, or identity theft
- Creation of an expectation of a customer's transactional behavior
- Monitoring of a customer's transactions against their expected behaviour and recorded profile as well as that of the customer's peers

KYC Jurisdiction and Locality

KYC regulations are local, and differ from country to country. Jurisdiction is also, on a coutry to country basis.

To know more about your specific country, visit: http://kycmap.com


KYC and Bitcoin Exchanges

Stricter KYC policies:

Bitstamp   https://www.bitstamp.net/privacy-policy/
Bitfinex       https://www.bitfinex.com/pages/tos  or refer inquiries to compliance@bitfinex.com
BTCChina   (only since new PBOC guidance, Dec 2013) (link?)
Cavirtex   https://www.cavirtex.com/faq
Coinbase    https://coinbase.com/legal/privacy
Kraken       https://www.kraken.com/legal/verification (their General Counsel, Constance Choi is a well known specialist in the Regulatory and Compliance field)
Cryptonit    https://cryptonit.net/regulations


Loose or non-existant KYC policies:

BTC-e   (??)
Crypsty   (??)
LocalBitcoin (p2p based, limited KYC?)



What is AML?

Standing for "Anti-money Laundering", it is a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions. In most cases money launderers hide their actions through a series of steps that make it look like money coming from illegal or unethical sources was earned legitimately.

Who has to enforce AML?

In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit that was held in Paris in 1989.

The Task Force was given the responsibility of examining money laundering techniques and trends, reviewing the action which had already been taken at a national or international level, and setting out the measures that still needed to be taken to combat money laundering. In April 1990, less than one year after its creation, the FATF issued a report containing a set of Forty Recommendations, which provide a comprehensive plan of action needed to fight against money laundering.

The FATF calls upon all countries to take the necessary steps to bring their national systems for combating money laundering and terrorism financing into compliance with the new FATF Recommendations, and to effectively implement these measures.

Again, as in the case of KYC, financial institutions and/or regulated companies are responsible for the implementation of internal AML policies.

AML Jurisdiction and Locality

AML regulations are also local, and differ from country to country. Some countries choose a top-down approach, inheriting much of their AML policies from the FATF, while others go for a bottom-up approach and then have to reconcile both policies. Extreme countries where such reconciliation is impossible (generally due to Government unwillingness) are excluded from the FATF membership, with the corollary of increased complications to access the international markets and financing.

For a full list of FATF members, visit:         http://en.wikipedia.org/wiki/Financial_Action_Task_Force_on_Money_Laundering

AML and Bitcoin Exchanges

Currently in compliance:

Bitstamp   https://www.bitstamp.net/aml-policy/
Bitfinex      https://www.bitfinex.com/pages/tos or refer inquiries to compliance@bitfinex.com
Cavirtex   https://www.cavirtex.com/why_virtex#proactively_working
Coinbase    https://coinbase.com/legal/privacy
Kraken       https://www.kraken.com/legal/aml (their General Counsel, Constance Choi is a well known specialist in the Regulatory and Compliance field)
Cryptonit    https://cryptonit.net/regulations

Unknown status:

BTCChina   (unclear since new PBOC guidance, Dec 2013) (are they financial institutions?)
BTC-e   https://btc-e.com/page/1
LocalBitcoin (p2p based, limited or no AML?)


WARNING:
Assume that restrictions for any Bitcoin to National Currency exchange may become more restrictive at any time in the future. Many exchanges in the past have restricted currency deposits or withdrawals proactively as BitStamp has, without any explicit order from a government agency to do so at the time. Others like BTCChina have in response to concerns made even the ability to continue to login to their platform contingent on supplying further identifying information. In the past surprise changes to AML/KYC requirements have lead users of exchanges to have their access to deposited funds substantially delayed while complying with new requirements or even lost access to their deposited funds completely if they could not comply with the new requirements. Changing AML/KYC exchange enacted AML/KYC requirements have affected users of all major exchanges that handle both Bitcoin and National currency. People who continue using such exchanges should prepare for the contingency that their exchange of choice will change their AML/KYC requirements in the future.

[Isaremj3]

Sometimes people do misunderstand what kyc mean and they use to run from project when they see kyc. However, the meaning know your customers that is the team we know where the participate are from, I mean the participate in both the ICO and Bounty.   All, this information help a lot .

[elpape225]

OptiToken almost done with ico, who got moon tickets

[Tungnguyenmmo]

The guide is very an easyt-to-understand one. I saw KYC and AML terms in white papers and then I made google search about them. But the results were not simple. Your explanation is nicely done thank you.

[nghihuynh2018]

We knew that KYC/AML will be one of the main reasons why the regulators and government will ban or accept crypto currencies

[Dilerium90]

I saw most of the bounties using KYC these days. are they really necessary? bounty hunters are not investors.how can they laundering money by doing bounties.

I have the same question, because, if i help to spread information about project and i am not investor, why should i go through KYC? And the answer, i think, that managers have chance not to pay you, because sometimes you just can't do KYC.

[crypki21]

I actually like the idea of KYC/AML to have the chance to filter suspicious contributors for instance. However, I do not see the system fully protected either, and the possibility of fraud with personal data is also a big concern.

[Chinedu157]

nice piece of write up, thanks

[fibrolit]

I saw most of the bounties using KYC these days. are they really necessary? bounty hunters are not investors.how can they laundering money by doing bounties.

I have the same question, because, if i help to spread information about project and i am not investor, why should i go through KYC? And the answer, i think, that managers have chance not to pay you, because sometimes you just can't do KYC.

Perhaps the owners of the projects are just hedging their bets. Recently, many countries have adopted and developed laws aimed at the legalization and regulation of cryptocurrency.