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KYC abolition is not a niche, but mainstream: millions of users are already here
Here is my version.
KYC abolition is not a niche, but mainstream: millions of users are already hereThere are many types of businesses whose owners can serve any customer without hesitation: hair salons, grocery stores, restaurants, and so on. They are not expected to ask who their customers are or where their money comes from. In fact, in many countries they are legally required to serve everyone, and refusing service to certain categories of customers may be considered discrimination.
But when it comes to businesses dealing with highly liquid assets - such as cryptocurrencies - the norm is very different. In this case, business owners are expected to know their customers. That means requesting documents, selfies, and sometimes even information about sources of income.
On one hand, this seems understandable. You cannot easily resell a haircut or a restaurant meal, and even reselling groceries typically involves losses. Cryptocurrency, however, can be transferred and resold instantly. This makes it convenient for use in schemes designed to obscure transaction trails.
(Although, strictly speaking, this is a misconception. Blockchain transactions are recorded permanently. Even if today it is not always possible to trace a transaction chain back to a specific individual, no one can guarantee that future technologies will not make this possible.)
On the other hand, does this really mean that the responsibility for identifying customers and verifying their funds should fall on the businesses providing these services?
I believe the answer is no. Here is why.
1. Imagine launching a crypto business. You invest time, effort, and money into attracting your first customers. And when they finally arrive, you tell them: show your passport, take a selfie, and explain who you are and what you do, because we are required to collect this information. What will they do? They will leave. At that stage, your business has no reputation. No one knows you yet. It is only natural that people are reluctant to disclose personal information to a newcomer. Even if KYC is widespread, customers will gravitate toward large, established companies they already trust. This undermines fair competition, creates barriers to entry for new players who might offer better conditions, and ultimately leads to oligopolies and market stagnation.
2. Many countries have strict data protection laws. Personal data cannot be collected or stored without explicit (often written) consent. But what if a person simply does not want to give that consent to anyone?
Do they have the right to privacy? Yes.
Do they have the right not to disclose that they even intended to use a particular service - even to the service provider? Also yes.
Formally, these rights exist. In practice, however, such individuals face significant discrimination. They are effectively excluded from accessing services that require KYC. This creates a problem for everyone: both businesses and consumers. Both sides are willing to transact, yet the business is forced to collect personal data, and the customer is effectively forced to consent. Not voluntary consent - but coerced consent.
3. Secure storage of personal data is expensive. Protecting it from leaks and breaches is not trivial, especially when data is transmitted over the internet and stored digitally. This increases operational costs for businesses, which ultimately translates into higher prices for customers. And if customers have a choice, they will naturally prefer cheaper services. Imposing KYC on businesses is, in many cases, economically destructive.
4. Finally, who is supposed to fight crime - businesses or law enforcement? Businesses are paid to provide services. Law enforcement agencies are paid to enforce the law. If businesses are expected to perform part of law enforcement’s role, why are they not compensated for it? Why not reallocate part of the law enforcement budget to businesses forced to carry out KYC procedures? That would at least be fair. But instead, the opposite happens - and that is exactly the point made above.
All of this makes the current approach to KYC feel fundamentally unfair. That is why many businesses try to avoid it. And many users do too. If you are one of them, there is nothing unusual about it. It is not marginal behavior. It is mainstream. In the crypto space, people are often willing to pay a premium simply to avoid being asked for a passport and a selfie. There are millions of such people.
Most importantly, avoiding this does not always come at a high cost.
b1exch.to guarantees exchanges without KYC with commission rates that, for most directions, are only 1%.
