Trezor implements Address Ownership Proof Protocol, more regulation less privacy

[hatshepsut93]

I find this regulation rather useless than dangerous. How can it stop people from buying Bitcoin and sending it to terrorists? So what if they need to prove that they own the address, after they made a withdrawal to it, they can send it to anyone they want. And exchange already has KYC information of a customer, so if investigators will be tracing some criminal transactions, they will find it either way.

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[Fortify]

Apparently certain countries such as The Netherlands implemented a new rule/requirement. You cannot withdraw your coin from an exchange to an address they do not KYC.

If you want to self custody, you must prove you "own" an address before you can send anything. After the fucking OFAC compliant blocks we now have AML compliant transactions.

The protocol is called AOPP (short for Address Ownership Proof Protocol) and you can find all the details on their official website here: https://aopp.group/

If you look at the company behind this protocol 21analytics.ch they have some screenshots featuring their product. This combined with something like chainalysis can have devastating consequences for privacy. What is even more surprising is we have not only trezor implementing this bullshit but also sparrow and bluewallet....

Source: https://www.coindesk.com/tech/2022/01/27/trezor-adopts-swiss-travel-rule-protocol-for-private-crypto-wallets/

Some clarification / edit:
Yes for now its only for a few countries such as the Netherlands , Switzerland, Singapore, etc. But lets not be fooled, this will become normalized and more and more common.

This was somewhat inevitable since the dawn of cryptocurrency. Governments have had fairly good views of money flows into and out of their country via banks - they have the ability to see all transactions due to financial money laundering laws. Cryptocurrencies undermined that whole structure and effectively allowed large and unregulated movement of money, which is bound to be used by even just a small percentage of criminals. Like it or not, these cryptos have been abused by a small minority and it is often a small minority that ruin it for the majority, causing new laws like this to become required. The taxman is also keen to access this information to make sure everyone is paying their fair share, so that was going to pop up at some point too.

[unrealisticexpectations]

They appear to have reverted their decision (source: https://blog.trezor.io/a-decision-on-aopp-789540c2930b) I edited the first post to reflect this. I think its a welcome decision, you should not make surveillance easier.

[mk4]

New update on Trezor: https://twitter.com/Trezor/status/1487091879883722755



Not sure what they were thinking initially to actually support AOPP in the first place, but at least they've changed their minds.

[franky1]

trezor seeing sense
not only is the aopp a gimmick that does not stop hackers from withdrawing funds and just puts an extra headache into withdrawing simply so an exchange is not seen as servicing an illicit receiver(which can also be worked around, thus useless feature).

but also for trezor to implement it, means a cold/hardware wallet, is less secure as it needs to be plugged in to a pc and then API a website. which can then put trezor device owners more at risk by browser extension hijacking to replace keys with ones supplied by the trojan extension.

yep trezor should not be adding more internet connectivity links. it should stay 'local'

[Oshosondy]

I don't know any CEX exchange not requiring KYC process of verification before you can withdraw anything (or maybe small amours below 50$) so privacy and CEX cannot go together.

There are still CEX that will only require username and email from you and 2fa but optional. Example is Kucoin. But just that CEX can request for verification at any time and customers accounts can be freeze at the time.

Paper wallets and offline cold wallets are the way.

These wallets will make your coins to be safer, online wallets can still be used with small funds, control and privacy can still be if the person is careful enough. They are all different from custodial exchanges wallets.

[stompix]

If it's to prevent money laundering then just a nonsense idea. If all the exchanges walk this way, then decentralized exchange volumes will be higher.

It wasn't even meant to prevent money laundering, just a stupid useless tool that basically does nothing.
After you go beyond their first page of PR when they quote money laundering and FACTA regulation you get to the point where:

AOPP is a protocol that is used between a VASP (virtual asset service provider, e.g. exchange) and an end user.
The VASP already knows the personal details of the end user. Nothing changes there.
When a user withdraws coins from a VASP he needs to specify a destination address. Nothing changed there, too

This thing doesn't do anything, he is a simple tool that provides a signed message, just like any damn 3 lines of code tool out these, if an exchange wants to add further security to your account they can simply ask for this themselves and add another layer of protection to the whitelist addresses, simple as that.
They just tried to sell to everyone a tool for signing messages with your key under the disguise of actually doing something usefull.

But they still allow cash withdrawals there, right? So the entire "illegal activities" argument doesn't hold.
Didn't South Korea have one of the highest Bitcoin adoption rates in the world? Call me paranoid, but could it be they're protecting other financial interests trying to discourage the use of Bitcoin?

You can't withdraw cash unless you do it to a bank account that has been also whitelisted, and after their regulations, all accounts enlisted are checked by the FIU.
So you can't basically withdraw either fiat or crypto to an account that is not already KYC and has your name on it.

As for the usage, I'm always skeptical about those 10-20% numbers, assuming we have 100 million users in India and zero protest about their laws or 20 million in Nigeria and zero protest when the banking ban was put in place makes me think the numbers are highly inflated. But in the case of South Korea probably the pill was far easier to swallow, their capital control rules are probably the toughest in the world, and poeple are used to, you simply can't get money out of SK, that's why coins always have a premium there as it's costly for them to acquire from foreigners since those can't get their money out of there and in their bank account.

[bbc.reporter]

I am surprised that wallet want to involve in address ownership proof protocol, is it hard than individual to give their address to the exchange they are using? Noncustodial wallet should remain noncustodial wallet. What I see about this is a marketing strategy for trezor for people in the country to buy their hardware wallet, or may be trends or what is currently going on in the country but trezor should not have done anything.

Trezor’s Address Ownership Proof Protocol was only trying to make address verification easier for Swiss users. I reckon the community on Twitter was only upset over nothing. It is head shaking because much of them are not living in Switzerland and none of their anger has made Switzerland change or remove the travel rule. This anger the community has over Trezor is pointed to the wrong people hehehe.

[Darker45]

It seems a tug of war is happening at the moment, with both sides gaining the advantage alternatively. First, there was the good time, and then came AOPP, and then followed the outcry which resulted to the wallets taking back the implementation.

It is interesting that the public's voice prevailed at the moment. But how long could such a force as public outrage stop these wallets from bowing down to the letters of the law? How long does the resistance last? Could these wallets continue to submit to the demands of their clients when what could be at stake eventually is their license to operate?

[Oshosondy]

Trezor’s Address Ownership Proof Protocol was only trying to make address verification easier for Swiss users. I reckon the community on Twitter was only upset over nothing. It is head shaking because much of them are not living in Switzerland and none of their anger has made Switzerland change or remove the travel rule. This anger the community has over Trezor is pointed to the wrong people hehehe.

There is nothing Trezor want to do aside from ways to market its product, if we see companies like that, it is normal that they want what people are requiring from them. Trezor will think for Swiss people to know more about their wallet, that they can support what Swiss government want, but it supposed not to be like that, trezor is a company that produce noncustodial type of wallet, they should work more on how the wallet can remain noncustodial, not to focus on any kyc or custodial means of usage.

[bbc.reporter]

Trezor’s Address Ownership Proof Protocol was only trying to make address verification easier for Swiss users. I reckon the community on Twitter was only upset over nothing. It is head shaking because much of them are not living in Switzerland and none of their anger has made Switzerland change or remove the travel rule. This anger the community has over Trezor is pointed to the wrong people hehehe.

There is nothing Trezor want to do aside from ways to market its product, if we see companies like that, it is normal that they want what people are requiring from them. Trezor will think for Swiss people to know more about their wallet, that they can support what Swiss government want, but it supposed not to be like that, trezor is a company that produce noncustodial type of wallet, they should work more on how the wallet can remain noncustodial, not to focus on any kyc or custodial means of usage.

Trezor did not need develop AOPP. The users in Switzerland can still do the compliance requirements manually but this is annoying. I might be mistaken, however, AOPP did not change anything. It has only automated the compliance requirement and made it easier for users. This is why the public outcry might be pointed to the wrong people. It should be pointed to the government because the travel rule that they are enforcing is very intrusive and inconvenient for users.

[Oshosondy]

Trezor did not need develop AOPP. The users in Switzerland can still do the compliance requirements manually but this is annoying. I might be mistaken, however, AOPP did not change anything. It has only automated the compliance requirement and made it easier for users. This is why the public outcry might be pointed to the wrong people. It should be pointed to the government because the travel rule that they are enforcing is very intrusive and inconvenient for users.

If AOPP can be done manually or not, maybe frustrating or not, noncustodial wallets should not support it at all, they should just stay in their line rendering only noncustodial means of holding coins, Swiss people should have a custodial wallet or use custodial wallet that support AOPP for convenience but they are not in control of their coins if they use custodial wallet. Noncustodial wallets should not support anything of such that is related to privacy invasion.

[bbc.reporter]

Trezor did not need develop AOPP. The users in Switzerland can still do the compliance requirements manually but this is annoying. I might be mistaken, however, AOPP did not change anything. It has only automated the compliance requirement and made it easier for users. This is why the public outcry might be pointed to the wrong people. It should be pointed to the government because the travel rule that they are enforcing is very intrusive and inconvenient for users.

If AOPP can be done manually or not, maybe frustrating or not, noncustodial wallets should not support it at all, they should just stay in their line rendering only noncustodial means of holding coins, Swiss people should have a custodial wallet or use custodial wallet that support AOPP for convenience but they are not in control of their coins if they use custodial wallet. Noncustodial wallets should not support anything of such that is related to privacy invasion.

However, the argument is did anything change when Trezor removed the implementation of AOPP? My argument is that nothing has changed. This public outcry is pointed to the wrong people. People who only wanted to automate wallet verification and make it easier for Swiss users. The public outcry should be pointed to the intrusiveness and the inconveniences caused by the travel rule. Also, if I am not mistaken AOPP is optional.