The mystery of so called no-KYC VISA/MC cards

[alani123]

This is a must read on no-KYC cards:
https://x.com/defyneric/status/2021116183898886201

For what it's worth, many of these cards have a notoriously bad offering. They are very costly and also very risky whilst cheaper and more reliable solutions exist for any potential use case.

Makes you wonder why they would even exist aside of deceptive marketing. .

I have another theory:

I'm suspecting some of these so called no KYC cards might be fronts for some things that could be grey market activity. Or even black.market in some csxes. So they might have a fixed clientele already and any extra revenue they get is also just a bonus.

I can lay an example for this for grey market activity which isn't exactly a crime worth of jail time in most jurisdictions, just tax avoidance.
If I have a business that has a lot of cash activity, let's say a bar, if I were to state 100% of my income in my tax statements I'd get hit with a tax and deductions totalling like 40% in most countries.

Instead I can have a friend become a livestreamer and bombard them with gifts. At worst these have a 15% tax rate or even 0% in some cases. The card service takes a small cut, my livestreamer friend becomes famous and even also gets a small cut and I still save more tbs paying 40%.

If I can create an apparatus where I have just a couple of such clients, why not open up a little? Extra revenue and extra cash mixed in which helps with plausible deniability.

So if you end up using such products there's a high chance you're being used as liquidity to a money laundering operation. One could argue that this is the case with all crypto businesses but at the same time also some businesses have a higher percentage of their business being linked to grey stuff than others.

[Free Market Capitalist]

I think it's a good article for not convincing anyone to stop using non-KYC cards.

The best part is the ending. He has convinced you how bad they are, but there is a glimmer of hope: a new type of non-KYC card that he and some of his buddies are going to launch. These are supposed to be cool, but after the wall of text, he doesn't explain how they will avoid the supposed problems that the current ones have, such as attracting people who have committed crimes to spend their dirty money with them.

[joniboini]

The general idea I get from reading that article is that relying on VISA/MC is not a viable in the long term solution, and their new solution, which allows users to send stablecoins to merchants directly, is the right move. At first glance, it feels like they're trying to make a new NFC card? I can see why it doesn't rely on Visa/MC, but it also requires merchants to offer their own POS that accepts NFC cards. I don't think it's too hard for those with experience; the question is whether other merchants will do the same. I wonder how they'll handle a dispute or chargeback if that's the case, though. CMIIW.

[Donneski]

I think two things can be true at the same time.

There’s clearly real demand for no-KYC cards from people who are either locked out of traditional banking rails or simply tired of handing over documents after every data breach headline. That part is understandable.

At the same time, any financial product built around minimizing identity checks will inevitably attract a slice of grey activity. That’s not moral judgment, that’s just how incentives work.

What I’m genuinely curious about is this: since the article criticizes existing no-KYC cards for abuse risk, how exactly does the proposed “new version” structurally solve that? If the incentive layer doesn’t change, I’m not sure the outcome will change either.

[rat03gopoh]

So what made them finally tell the "truth"? Their business was shut down?
I doubt a card business without KYC that works with networks like Visa or Mastercard can survive for long if its model relies on illicit funds.
Furthermore, without such a product, crypto is considered part of the largest fraud network, while they have turned a blind eye to what has happened to cash for years.

[Lucius]

~snip~
For what it's worth, many of these cards have a notoriously bad offering. They are very costly and also very risky whilst cheaper and more reliable solutions exist for any potential use case.

What do you consider very costly? I'm not saying that there are services that have fees that are expensive for many, but then again, there are also those that offer very reasonable fees and a completely solid service that lasts for years. Visa or MC, as well as those who issue such cards on their behalf, have certain verification mechanisms and do not allow any illegal activities in terms of large-scale money laundering or terrorist financing.

Most people who use such cards do so because it is the easiest way to convert cryptocurrencies into fiat and spend them on some basic things.

So if you end up using such products there's a high chance you're being used as liquidity to a money laundering operation. One could argue that this is the case with all crypto businesses but at the same time also some businesses have a higher percentage of their business being linked to grey stuff than others.

If you look at things that way, then the question arises whether it is worse to participate in some small money laundering operation or in a business that launders billions on a global level? I will always choose the lesser evil if I can, especially if it means I don't have to give out my personal information and risk being hacked.

[Free Market Capitalist]

What do you consider very costly? I'm not saying that there are services that have fees that are expensive for many, but then again, there are also those that offer very reasonable fees and a completely solid service that lasts for years.

The OP must never have used Bitcoin ATMs. As far as I remember, total fees of between 10% and 15% were the norm (sometimes in the form of a fixed fee per transaction plus a percentage). Now I don't know if they have changed their fee stucture because, since becoming KYC, they have lost their appeal.