g20 FATF regulations to demand kyc for recipient

[samdan777712]

I am really shocked at how little this is being spoken about online. There's going to be a deep amount of chaos over this. They dont even have the technology to enforce it. What they are basically saying is that they are going to force you to associate your hardware wallet with an identity if you want to use it to receive funds from any FATF country regulated exchange, which is basically every meaningful country on the planet. That's not safe, and that's not what crypto was meant for. If you can identify cold wallets you can track people. The travel rule applied to crypto i calamitous. And people who rely on anonymous exchanges like me are deeply in trouble. Most of these exchanges won't even accept americans.

People need to sue the government. This is supreme court international court level stuff, this has to be contested in court.

[figmentofmyass]

I am really shocked at how little this is being spoken about online. There's going to be a deep amount of chaos over this. They dont even have the technology to enforce it. What they are basically saying is that they are going to force you to associate your hardware wallet with an identity if you want to use it to receive funds from any FATF country regulated exchange, which is basically every meaningful country on the planet. That's not safe, and that's not what crypto was meant for. If you can identify cold wallets you can track people. The travel rule applied to crypto i calamitous. And people who rely on anonymous exchanges like me are deeply in trouble. Most of these exchanges won't even accept americans.

what's your source for this stuff? i've seen very little information about the G20 crypto discussions. all i've heard is they are taking cues from japan re regulations, which is bad news as it is.

People need to sue the government. This is supreme court international court level stuff, this has to be contested in court.

which court would that be?

[samdan777712]

this is a good summary of the actual FATF release which I read https://ciphertrace.com/response-to-fatf-on-vasp-regulation/

what i state are the ultimate consequences. Imagine expecting a fund manager or whale to store millions on a cold wallet hardware wallet address that is tied to an identity, or expecting them to send it to a software wallet or another wallet that is identifiable, then they send it to their anonymous private wallet. Now bad actors will hack databases to get names attached to wallets and amounts and target those people.

[eaLiTy]

That's not safe, and that's not what crypto was meant for. If you can identify cold wallets you can track people. The travel rule applied to crypto i calamitous. And people who rely on anonymous exchanges like me are deeply in trouble. Most of these exchanges won't even accept americans.

People need to sue the government. This is supreme court international court level stuff, this has to be contested in court.

It is a proposed draft to have strict procedure and rules set for exchanges, that does not mean that all your funds will be made public and will hurt your privacy, they will monitor the flow of funds from exchanges and that is not a bad thing either, with the N number of hacks in the past and all the frauds that happened here, we need such things to protect the user funds. Investor protection is a major factor when it comes to any investment and we have not seen that in the virtual market till now and have seen billions of dollars worth of scam and one way or the other the government will enforce that in the future.

[DdmrDdmr]

This is another sources that reports on FATFs intent: https://www.bloomberg.com/news/articles/2019-06-11/crypto-exchanges-are-facing-biggest-regulatory-hurdle-yet?srnd=cryptocurrencies

I can’t really see mandatory KYC of a kind to identify recipients of TXs, unless the whole system changes completely or extreme outbound restrictions are made to centralized exchanges, which would likely shift balance off to true DEX type exchanges. Nevertheless, tighter regulation is just a question of time and pace, whilst the extent of it will be a struggle between desire and feasibility.

[stompix]

what's your source for this stuff? i've seen very little information about the G20 crypto discussions. all i've heard is they are taking cues from japan re regulations, which is bad news as it is.

The topic is a mess.
The G20 is simply a meeting,  every topic discussed there even if agreed on it's only formal and needs to be put in law by a country to country agreement.

The FATF is more of a react and pursue ways to deal with stuff organization.
It does not investigate or prosecute but its guidelines sometimes carry more weight that everything.

People need to sue the government. This is supreme court international court level stuff, this has to be contested in court.

which court would that be?

International court for.....care bears.
You simply can't sue the government for adopting a recommendation of an organization which the country is a member.
Even if a court would grant a process it would have only one outcome and that would be for the country to renounce its membership which would be at least damaging for the financial sector.

No country on earth would do such thing for 10-20k crypto lovers.

But just as other topics here, this was blown out of proportion.
#DdmrDdmr posted a link that clears a lot of stuff.

[Nadziratel]

The topic is a mess.

Basically, this topic is copy-paste product only So, don't look for meaning so much.

[Haunebu]

Why panic over something like this op? These kind of things are pretty common in the crypto world(Regulations, laws, proposals etc) trying to restrict or ban crypto usage since ages, but nothing actually changed.

Scammers continue to hack exchanges while investors continue to trade crypto anonymously via exchanges which don't ask KYC. No number of rules can ever destroy the anonymity aspect of the crypto world.

[Adriano2010]

Maybe in future we will have to do kyc on most sites ți use crypto, but i think for now we don't need to be worried and i think never will have to do kyc if we have a hardware wallet to use it.

[Kakmakr]

Governments all over the world are trying to slowly but surely tighten the knot on all forms of privacy, including everyone's financial privacy. Why do you think most of them are trying to establish a cashless society? They want to eliminate cash, because it is too difficult for them to track and trace it.

They are pushing for debit and credit cards to be used and for people to use regulated/centralized financial institutions like PayPal and also the new Facebook coins, because it is easier to track all transactions if it is stored on a centralized and accessible databases.  {We know these centralized organizations are feeding the private information to these 3 letter agencies.}  

They will do the same with Bitcoin. 

[avikz]

I am really shocked at how little this is being spoken about online. There's going to be a deep amount of chaos over this. They dont even have the technology to enforce it. What they are basically saying is that they are going to force you to associate your hardware wallet with an identity if you want to use it to receive funds from any FATF country regulated exchange, which is basically every meaningful country on the planet. That's not safe, and that's not what crypto was meant for. If you can identify cold wallets you can track people. The travel rule applied to crypto i calamitous. And people who rely on anonymous exchanges like me are deeply in trouble. Most of these exchanges won't even accept americans.

People need to sue the government. This is supreme court international court level stuff, this has to be contested in court.

Why are you worried?? Are you a terrorist?? Are you a tax evader?? Do you launder money??

If you are not doing anything illegal, then why do you think it's not safe? What and whose safety you are referring to??

Crypto is being seen as a big threat to the current economy because governments can't track transactions. If a person is not doing anything illegal then why that person would be worried? You can make millions in crypto trading, but if you are paying your taxes diligently, what the problem??

I am sure governments would not take any such drastic step because that would be considered as an interference in personal life, but even if it happens, why a law abiding Citizen would be worried?

Regulation will be beneficial for cryptos. Mark my word! I am not an outlaw and I prefer to stay within the framework and still grow huge!

[bitcoindusts]

This is another sources that reports on FATFs intent: https://www.bloomberg.com/news/articles/2019-06-11/crypto-exchanges-are-facing-biggest-regulatory-hurdle-yet?srnd=cryptocurrencies

I can’t really see mandatory KYC of a kind to identify recipients of TXs, unless the whole system changes completely or extreme outbound restrictions are made to centralized exchanges, which would likely shift balance off to true DEX type exchanges. Nevertheless, tighter regulation is just a question of time and pace, whilst the extent of it will be a struggle between desire and feasibility.

True enough and i wonder what would be the status of cryptocurrency by then after which this tightening is implemented particularly bitcoin. This will be a matter of choice for us, to put our identity at risk and continue the game or just leave the matter behind and shift to something safer.

[dothebeats]

I haven't come across an article which deeply explains what the G20 summit is going to do with regards to cryptocurrency regulations. All I know is Japan is handling/leading the cause, which to me is somewhat fair knowing how far ahead Japan is in crypto regulations than other countries out there. Perhaps regulations wouldn't go to the extreme end of the spectrum, like what you're trying to say in here but instead just making sure things wouldn't go out of hand for money laundering and other fraud schemes that is basically lingering the cryptocurrency scene up to now.

Unless official reports from the G20 summit surfaces, I won't react til then.

[Ailmand]

Maybe in future we will have to do kyc on most sites ți use crypto, but I think for now we don't need to be worried and I think never will have to do kyc if we have a hardware wallet to use it.

Kyc is being used for security purposes so I think we have nothing to worry about it unless we want to keep our transactions anonymous. There are exchanges that oblique us to pass the KYC for our own good. I'm sure that they will never do it for no reason.

[DdmrDdmr]

<…>

The thing is, the proposal (-to-be) is a bit wild under the current stand (see the article I referenced before: https://www.bloomberg.com/news/articles/2019-06-11/crypto-exchanges-are-facing-biggest-regulatory-hurdle-yet?srnd=cryptocurrencies).

<…> The guidelines will require companies ranging from exchanges Coinbase Inc. and Kraken to asset manager Fidelity Investments to collect information about customers initiating transactions of over $1,000 or 1,000 euros, as well as details about the recipients of the funds, and to send that data to the recipient’s service provider along with each transaction.<…>

From a technical point of view, applying KYC to facilitate the proposal’s requirements is already inherently partly in place, and the proposal’s net effects would effectively lead to a tighter control on those using an exchange, as well as passing information of those with TX with a FIAT value over 1K$/1K€ to some (unknown/unnamed) third-party authority or supervisor. That alone would be a step-up for many to step-down from centralized exchanges, but we can see that happening at some point regardless in one form or other.

What is technically non-feasible as is, is the part I marked in bold in the quoted text. If one sends BTC from an exchange to his Ledger (or other) wallet, there is no way to associate the recipient’s information other than the wallet address itself. To comply, one would need to either change the protocol to "add" information of the recipient (not going to happen I assume, since it would require associating identities to all addresses), or the exchange would need to perform a KYC (them or someone third-party entity) on the recipient himself, thus implementing a protocol for KYC customers only for both ends of a TX. That, in principal, would seem like something that would just push people in search for more anonymous alternatives, let alone the fact that it seems pretty wild to impose and implement.

Note that the text in bold is likely pretty preliminary I figure, and does not even consider the scenario of performing multiple TXs in a row with a value under 1K$/1K€ to bypass the intended proposal (i.e. no timeframe applied to an aggregate of TXs from A to B that surpass the limits when added together).

[Linkkoin]

Most likely this is going to lead to the point, that each wallet will need to be registered (just as a bank account) to a specific person who will need to be verified in order to use it.
And unfortunately - for privacy cryptocurrencies to go fully underground.

As well, the verification of each transaction on exchanges will be much more time and manpower consuming.

For biggest fish in the market - it could mean that your transactions will be verified even in several days...what will drive away their customers.

And of course the fees will dramatically increase.

[Genemind]

I think time will come that Kyc will be hardly implemented. There will be no space for privacy and anonymity if that happens and it will be a burden for those who couldn't provide the documents required just to pass the Kyc. KYC is applicable in some cases especially for huge transactions but there must be an exception.

[samdan777712]

Wow seriously wow what kind of responses are these? Why do you all support state regulation that much? Why do you trust this level of surveillance if you believe in the philosophy of the bitcoin protocol? You clearly haven't read the papers, nor do you understand the gravity of what FATF and the bank secrecy acts are and how they affect financial privacy. Seriously what on earth are these responses to the effect of "If you have done nothing wrong you have nothing to fear" Seriously? That is the huge problem with crypto, too many non philosophical people came into it looking for a quick buck with no understanding of the real intent of bitcoin and now you want to help the regulators mash it into something that it is not. You clearly don't understand the broader geopolitical indications of America's financial surveillance laws.

You can sue. Once they start passing laws. People can sue the SEC and CFTC and force it to the supreme court and pressure congress into reevaulating the g20 meetings. Let's be real, America decides on FATF ultimately, it's America ruling the world. Literally, not hyperbolically, if we say jump, you jump.

Do you have any idea how much money is in bitmex? Do you think all those people are going to stay there when they are forced to kyc?

Centralized exchanges were a mistake. They are a step backwards ethically and in terms of political freedom. The point of bitcoin is to get your money away from the government and keep it away.

[stompix]

<…> The guidelines will require companies ranging from exchanges Coinbase Inc. and Kraken to asset manager Fidelity Investments to collect information about customers initiating transactions of over $1,000 or 1,000 euros, as well as details about the recipients of the funds, and to send that data to the recipient’s service provider along with each transaction.<…>

What is technically non-feasible as is, is the part I marked in bold in the quoted text. If one sends BTC from an exchange to his Ledger (or other) wallet, there is no way to associate the recipient’s information other than the wallet address itself. To comply, one would need to either change the protocol to "add" information of the recipient (not going to happen I assume, since it would require associating identities to all addresses), or the exchange would need to perform a KYC (them or someone third-party entity) on the recipient himself, thus implementing a protocol for KYC customers only for both ends of a TX. That, in principal, would seem like something that would just push people in search for more anonymous alternatives, let alone the fact that it seems pretty wild to impose and implement.

I don't understand why you think is not feasible.
They will simply keep a record for the transactions from which addresses they sent the fund to the exchange and to where they withdraw.
It's already been done by a lot of exchanges which do keep track of the addresses they customer use.

Mt gox, for example, was doing this for some of its clients.
Besides, there is a huge open public database with all those transactions, the blockchains themselves.

When you deposit from address A the address gets linked to your account. When you withdraw to address B, it gets linked to your account and identity. When somebody else deposits from address A to another account probably it will trigger some flags.

You can sue. Once they start passing laws. People can sue the SEC and CFTC and force it to the supreme court and pressure congress into reevaulating the g20 meetings.

Nope, you can't.
You can't sue the government for enacting laws, you can't sue the government for not enacting laws.
Let's all sue the governments for raising taxes

Besides, you're mistaken what the FATF and what the CFTC is doing and what regulations are they involved with.
Second, the g20 meeting is simply a meeting, the G20 has no power over internal politics.

[DdmrDdmr]

<…>

What I meant is that there are cases that are fully traceable, and those that are not. By trace I means not just the addresses used on the blockchain, but the identification of the individuals on both ends of the TX (which is what this is really about):

-   If User A on Exchange X sends BTC to User B on Exchange Y, then both users (A and B) are nominally identified.

-   If User A on Exchange X sends BTC to User B, and User B us using for example a Ledger Nano S, then User A is identified, but User B is not (the TX identifies the addresses involved, but not one of the nominal end User – User B).

Obviously User B could later be identified by analizing the Blockchain if he eventually moves the BTC on to an exchange for trading or conversion to FIAT, but until then, one side of the TX is not nominally identifiable. In any case, that would be a deferred (and not necessarily swift or easy) nominal identification of the recipient of the TX, which is not likely the spirit intended by the proposal.

Edit:

<…> Nope, they don't care about that, they need only the first link, the addresses from which the funds entered or to which they went, as user B will have no choice if he wants to use those BTC to try and exchange them where he will have to come to the surface himself.<…>

I can't see what's not clear about the intent in "<...>as well as details about the recipients of the funds, and to send that data to the recipient’s service provider along with each transaction.<…>". I stress the term intent as in the declarative intention, and I'd say the intent is to identify during the TX, not way down the road.