How long realistically before global mandatory kyc on all exchange/VASP?

[diazepam666]

If you believe you will find any problems on such exchanges don't keep your fund on that first. KYC is a mandatory for many exchanges reason days many crypto users does not like to to share their information for using other services.

define any exchanges without KYC policy you could have tried to avoid the hassles.

[malevolent]

The big question then becomes, how will highly compliant and tightly regulated exchanges (like Gemini) deal with noncompliant exchanges? Will they close your account for depositing coins from them? Gemini already prohibits mixing services, for example.

Reading FATF recommendations, if I'm not wrong, it looks like you'll only be able to withdraw your coins to whitelisted exchanges/services (those who would closely participate in exchanging information). Same goes for depositing, if the coins don't come from an approved source you won't be able to use that exchange.

Even shitcoin exchanges like bittrex are now asking for proof of funds & relevant documentation:

https://bitcointalk.org/index.php?topic=5157078.0

[coolcoinz]

FATF rules aren't accepted all around the world. Even within the EU some countries do not participate in this "project" so it's not the end of the world yet. That said, it won't be long until all exchanges fall and you'll have to use cash to remain semi-anonymous and even that will come to an end with the ideas of cashless society that more and more countries are supporting. Denmark is one of one of the current leaders when it comes to going cashless.

[squatter]

FATF rules aren't accepted all around the world. Even within the EU some countries do not participate in this "project" so it's not the end of the world yet.

Very true. I was initially under the impression that compliance was pretty widespread. It's the opposite really. Many dozens of monitored countries fail to implement the majority of FATF rules. This is decades after these standards were initially put in place. Often times, a mere pledge by a country to work towards implementing some of the standards is enough to stave off FATF pressure for years.

That means we'll probably see non-compliant exchanges persist for many years. My biggest concern is how compliant exchanges will interface with customers who send coins from non-compliant exchanges.

Let's say BitMEX continues their no-KYC policies in the face of these rules. What happens when you send a few bitcoins from your BitMEX account to your Gemini account? Will Gemini close your account? Seems possible to me.

[coolcoinz]

Very true. I was initially under the impression that compliance was pretty widespread. It's the opposite really. Many dozens of monitored countries fail to implement the majority of FATF rules. This is decades after these standards were initially put in place. Often times, a mere pledge by a country to work towards implementing some of the standards is enough to stave off FATF pressure for years.

That means we'll probably see non-compliant exchanges persist for many years. My biggest concern is how compliant exchanges will interface with customers who send coins from non-compliant exchanges.

Let's say BitMEX continues their no-KYC policies in the face of these rules. What happens when you send a few bitcoins from your BitMEX account to your Gemini account? Will Gemini close your account? Seems possible to me.

Is this even possible and/or worth the time and money put into retracing transactions? Even if they (in general) agree to not receive transfers from non-compliant exchanges, how much effort will they put into it. Probably not much because time and effort = money. Who's going to pay them to retrace millions of transactions back to their origin and sending transactions back? What will happen if somebody sends money to a third party first and then to the exchange, or sends money from a casino, or from a mixer?
It's going to be one of those laws people agree to obey and then they don't like speed limits and no parking signs.

[squatter]

Is this even possible and/or worth the time and money put into retracing transactions? Even if they (in general) agree to not receive transfers from non-compliant exchanges, how much effort will they put into it.

They just hire a company like CipherTrace to do it. I don't think it'll cost them much beyond what they're already paying for.

They already analyze customer transactions -- both in and out -- to identify transfers to/from casinos and sportsbooks, and they terminate accounts over it. This is to comply with the Wire Act and UIGEA. They are prohibited from transferring money to/from gambling businesses on behalf of customers.

I guess we need to wait and see what national regulations look like before making any assumptions.

What will happen if somebody sends money to a third party first and then to the exchange, or sends money from a casino, or from a mixer?
It's going to be one of those laws people agree to obey and then they don't like speed limits and no parking signs.

It's becoming increasingly common for exchanges to hold funds hostage and demand proof showing the source of funds.

To use Gemini as an example again, it's against their terms to send them coins from a mixer or a casino. They'll terminate your account over it. I hope they send your money back too.

[coolcoinz]

The question is will paying for tracing every single customer out of for instance 100k people is going to be worth it for the exchange. They will probably limit the screening to whales, but still CipherTrace won't do a thousand traces a day for cheap.
As for Gemini there are stories about them circulating on the forums. For instance, they tend to lock your account and demand a pay slip from your job to unlock it. Imagine that! Like what would that prove if? Say I'm selling 10k worth of crypto every month, but I'm earning 1k a month at my day job. How does that help them establish if I could or couldn't have that specific number of coins. I personally know an unemployed guy with over 10 BTC stashed away. They'd probably lock him forever on Gemini for money laundering.

[samdan777712]

which is why you people need to stop demonzing bitmex. You don't understand how dangerous these laws are and how dangerous and shitty and anti poor the american exchanges are. They arbitrarily demand exorbant amounts of financial information all the time. Most of us can only prove our income with our exchange trading history that is it. I have no tax history, no tax information, no employer, nothing.

Centralized exchanges are a scam. The Ren VM tools need to hit main net, and people need to start building a fully functional decentralized derivative exchange with no central server or liquidity provider and put an end to this crap.