New KYC rules for crypto wallets

[UmerIdrees]

FinCEN proposes new KYC rules for crypto wallets. If this is implement in true sense then no one can withdraw more than 10,000$ from the wallets until a detailed verification is done and an enhanced KYC for up to 3000$.
I think these regulations will not be healthy for the market growth and also people will be hesitant to move their funds on exchanges like coinbase.

[ranochigo]

The very basis of Bitcoin is to provide a peer-to-peer system where centralised system are out of reach of the government and this just proves that. If such regulations ever comes a reality, the only thing it'll probably affect are US exchanges. Does it harm Bitcoin? Definitely not. Plenty of P2P exchanges and those based overseas as well.

For those who care less about privacy, they probably won't care. For those that want to steer away from government surveillance, there are plenty of easy and accessible ways to transact.

[Lorence.xD]

The very basis of Bitcoin is to provide a peer-to-peer system where centralised system are out of reach of the government and this just proves that. If such regulations ever comes a reality, the only thing it'll probably affect are US exchanges. Does it harm Bitcoin? Definitely not. Plenty of P2P exchanges and those based overseas as well.

For those who care less about privacy, they probably won't care. For those that want to steer away from government surveillance, there are plenty of easy and accessible ways to transact.

Monero still does the job. The only reason that they want KYC is to get a hold of those juicy tax money that they can get from this bitcoin hodlers, hopefully this KYC thing is just a US jurisdiction because I do care about my privacy and I am not surrendering it anytime soon. This is a Sisyphean effort because people will always find a loophole.

[Upgrade00]

For those who care less about privacy, they probably won't care. For those that want to steer away from government surveillance, there are plenty of easy and accessible ways to transact.

This is one of the reasons I fail to understand the motive behind the proposal of these sort of regulations. It is just an attempt to track and monitor money flow in bitcoin rather than the publicized reason, which would be to prevent illegal usage of it, as there are many ways around these checks for someone who really wants to evade detection.

I think these regulations will not be healthy for the market growth and also people will be hesitant to move their funds on exchanges like coinbase.

This singular action would likely not affect Bitcoin that much or at all, those who care a lot about their privacy would find ways around it and would not be so easily pushed out of the BTC space. Those who do not wouldn't find a problem with the regulation.
Although if the proposal gets approved and more countries possibly adopt it, the noose could get tighter around private transactions and decentralized exchanges could be targeted.

[so98nn]

The very basis of Bitcoin is to provide a peer-to-peer system where centralised system are out of reach of the government and this just proves that. If such regulations ever comes a reality, the only thing it'll probably affect are US exchanges. Does it harm Bitcoin? Definitely not. Plenty of P2P exchanges and those based overseas as well.

In reality it won't matter since there are hundreds of wayout to turn your btc into fiat. In a way or other people do exchange bitcoin over p2p sites, national or international and can work it out.

If KYC stuff becomes stringent then there would be another companies who will offer KYC less withdrawl by using other countries rules and regulations. They will have more customer base and more income so they will surely do this for minimal fees.

For those who care less about privacy, they probably won't care. For those that want to steer away from government surveillance, there are plenty of easy and accessible ways to transact.

This kind of group is increasing daily. People in my circle are actually showing up crypto currencies as their second income and they file taxes for it. This helping them to get more credibility in the banking system.

So yeah, there won't be much tension on the crypto system for sure.

[momchilandonov]

I hope that most wallets will just ignore this. Non-custody wallets as ownr, exodus, coinomi, etc even dont know how much customers hodl there

[UmerIdrees]

I hope that most wallets will just ignore this. Non-custody wallets as ownr, exodus, coinomi, etc even dont know how much customers hodl there

But this will be forced to be implemented on coinbase and other regulatory exchanges. Anyone knows if binance would be liable to obey these new regulations ? 

[GazetaBitcoin]

But this will be forced to be implemented on coinbase and other regulatory exchanges. Anyone knows if binance would be liable to obey these new regulations ? 

All centralized exchanges ask for your KYC for years. What are you talking about...? Don't tell me you did not know that. The problem is not with centralized exchanges, but with independent, decentralized wallets. Govern's move regards these wallets, not the exchanges, as the exchanges already ask for KYC.

This is a quote from the article you mentioned in OP (boldface is mine):

If enacted, the proposed rule,  [...] would subject self-hosted wallets to heightened anti-money laundering standards, meaning anonymous transacting could become a thing of the past.

[o_e_l_e_o]

This is one of the reasons I fail to understand the motive behind the proposal of these sort of regulations. It is just an attempt to track and monitor money flow in bitcoin rather than the publicized reason, which would be to prevent illegal usage of it, as there are many ways around these checks for someone who really wants to evade detection.

It's about surveillance. America, and most other western nations, are surveillance states. None of this is about prevent terrorists, catches criminals, protects the children, or any of the other nonsense they feed you when they are invading your freedoms. This is about surveillance. Just as they don't like people being able to communicate with each other privately which is why they try to ban encryption or force back doors in to software, and just as they don't like people being able to browse the internet privately which is why they record all your traffic and try to attack Tor, they definitely don't like people being able to spend or transfer money and buy thing privately without them being able to stick their noses in. Knowledge is power. Surveillance is control.

Although if the proposal gets approved and more countries possibly adopt it, the noose could get tighter around private transactions and decentralized exchanges could be targeted.

Enter Bisq. It is open source and freely distributed, just like bitcoin. Short of taking control of 51% of the hashrate (which would render bitcoin useless anyway) and censoring my transactions, they can't stop me trading peer to peer with another user.

[Masternode_Support]

People want to use crypto to be anonymous. There is absolutely no point in taking documents for wallets. People will surely use the anonymous wallets in this case. How dumb this thing feels.

[UmerIdrees]

But this will be forced to be implemented on coinbase and other regulatory exchanges. Anyone knows if binance would be liable to obey these new regulations ? 

All centralized exchanges ask for your KYC for years. What are you talking about...? Don't tell me you did not know that. The problem is not with centralized exchanges, but with independent, decentralized wallets. Govern's move regards these wallets, not the exchanges, as the exchanges already ask for KYC.

This is a quote from the article you mentioned in OP (boldface is mine):

If enacted, the proposed rule,  [...] would subject self-hosted wallets to heightened anti-money laundering standards, meaning anonymous transacting could become a thing of the past.

KYC is a common thing for all exchanges but this new purposed rules says something more than the KYC for transactions above $10,000.

The rule calls for enhanced know-your-customer (KYC) requirements for withdrawals greater than $3,000. For transactions larger than $10,000, firms would have to report to FinCEN. It would require banks and MSBs to file information pertaining to a customer's transaction and their counterparty, including names and physical addresses to verify both parties' identities.

[cryptomaniac_xxx]

FinCEN proposes new KYC rules for crypto wallets. If this is implement in true sense then no one can withdraw more than 10,000$ from the wallets until a detailed verification is done and an enhanced KYC for up to 3000$.
I think these regulations will not be healthy for the market growth and also people will be hesitant to move their funds on exchanges like coinbase.

I don't know what detailed KYC can exchanges will implement with this so called enhance verification. Crypto enthusiast have been complying for years, even sending their personal info and pictures just to get verified.

There's still p2p exchanges out there like:

• https://hodlhodl.com/
• https://bisq.network/

[manfredmann]

KYC is not needed actually because bitcoin is independent and can stand alone even without regulations. However, due to some conflict of interest from the different countries around the world so they have to regulate this kind of system. I do not like what they are doing with bitcoin but if their intention is for the good of all then so be it. Hooefully, it will not really hurt the bitcoin system.

[Upgrade00]

The term "self-hosted" is quite vague, but this rules obviously can't be applied to non-custodial wallet where user have access to their private key/mnemonic words.

Non custodial wallets is actually the target of the regulation, inorder for governments to be able to fully monitor transactions and money flow in cryptocurrencies.

I doubt non-custodial wallet (especially open source ones) would change itself become custodial wallet.

From what I understand, they plan to use the exchanges not the wallets themselves. So if you have an account on a centralized exchange and intend to transfer bitcoins to a non custodial wallet, you would be put through 'enhanced KYC' for amounts above $3k and $10k. And the success of the transaction would depend on the financial regulations, so your funds would be effectively held till it's approved (for $10k+) and your non custodial wallets would be linked to your identity.

Enter Bisq.

It seems the app needs to be paired with the desktop version for it to work. Is there any way one can use it without a PC?

[o_e_l_e_o]

I do not like what they are doing with bitcoin but if their intention is for the good of all then so be it.

Obviously their intention is not for the good of all. Their intention is control the population and bring bitcoin under their control as much as possible, because it threatens the fiat banking system which is what their power depends on.

So if you have an account on a centralized exchange and intend to transfer bitcoins to a non custodial wallet, you would be put through 'enhanced KYC' for amounts above $3k and $10k.

Which is an equally stupid position for them to try to enforce, since it is essentially impossible to prove if an address is custodial or non-custodial.

And the success of the transaction would depend on the financial regulations, so your funds would be effectively held till it's approved (for $10k+) and your non custodial wallets would be linked to your identity.

How? They want me to submit my master public key along with my ID documents so they know every address I generate? Fuck that. Anyone even considering allowing this to happen should just go back to fiat, since what you will be left with will be less private, more monitored, and depend on trusting more third parties than fiat will.

It seems the app needs to be paired with the desktop version for it to work. Is there any way one can use it without a PC?

Not at the moment. The Bisq app isn't a standalone app at the moment - it simply links up to your computer software and provides notifications to your phone of trade activities, offers being accepted, etc.

[eaLiTy]

But this will be forced to be implemented on coinbase and other regulatory exchanges. Anyone knows if binance would be liable to obey these new regulations ? 

Wallets like Coinbase and Xapo implemented KYC a few years back, i do not remember whether i voluntarily completed or they enforced as it happened a few years back and you should expect strict rules being implemented in every cryptocurrency related business and there are proposals from the EU to implement strict KYC by exchanges without the loophole to withdraw minimum amounts and we should expect the same in other cryptocurrency related business as well.

[GazetaBitcoin]

I doubt non-custodial wallet (especially open source ones) would change itself become custodial wallet.

From what I understand, they plan to use the exchanges not the wallets themselves. So if you have an account on a centralized exchange and intend to transfer bitcoins to a non custodial wallet, you would be put through 'enhanced KYC' for amounts above $3k and $10k. And the success of the transaction would depend on the financial regulations, so your funds would be effectively held till it's approved (for $10k+) and your non custodial wallets would be linked to your identity.

From what I understand, govern's main concern is the use of decentralized wallets regarding the amounts the users utilize them for. But even if this is the case, or just the exchanges are forced to use "enhanced KYC" (so something additional to the KYC procedures used now), this can be a great benefit in the end: to be more precise, it is possible that more and more users to cease using centralized exchanges and stick to standalone, decentralized and anonymous wallets, as it was meant to be. Satoshi did not create Bitcoin for being speculated on exchanges.

If people will start using Bitcoin in an anonymous, decentralized, peer-to-peer manner, they won't have problems with the govern anymore. They'll take the power from the elites back to their hands, as Satoshi intended. And this could be a huge step toward crypto-anarchy, freedom and liberty!

[Coin_trader]

This kind of limitation on KYC is already implemented on our local wallet coins.ph few many years ago so I will not be surprised to see this kind new law since its inevitable that they will regulate the amount of money the user can withdraw or deposit in crypto. This is there counter measure for money laundering since many money launderer are buying BTC over the counter then withdraw it to there bank. In that case, they can easily wash there money using crypto since wallets and banks don't limit the amount of widrawn/deposit.

[cabron]

I didn't read the PDF but would it be possible for them to  mandate the developers of  the wallet like electrum wallet and the likes that users has to submit KYC documents?

To the exchanges I guess we all have already grasp the idea that they really will ask these data eventually but I wouldn't expect that even the wallets like hardware wallets. This is really not half measures anymore.

[Upgrade00]

<...>

I wasn't disputing any of that, in fact in a previous response I already gave my take on what their intentions actually are.

It is just an attempt to track and monitor money flow in bitcoin rather than the publicized reason, which would be to prevent illegal usage of it, as there are many ways around these checks for someone who really wants to evade detection.

And it obviously goes against the vision of Satoshi, I assumed that goes without saying.