Is anyone else starting to become a bit worried? mod note in first post

makeorbrake wrote: »

The whitepaper itself

The stated goal in the white paper is to provide an architecture “allowing any two willing parties to transact directly with each other without the need for a trusted third party”, and the introduction explains that the rationales for doing this are to provide more certainty (irreversible transactions) and to reduce transaction cost (which at the moment Bitcoin only achieves for large cross border transactions).

See Satoshi’s own words in the white paper here: https://bitcoin.org/bitcoin.pdf

What specific quotes in there do you think show that the author wanted to fight the concept KYC/AML?

Also important I think is to recognise that while the white paper describes a system “allowing any two willing parties to transact directly with each other without the need for a trusted third party”, if doesn’t say that additional layers can’t be built on top of that system which are introducing third parties or a need for trusted relationships. What is key is that the option to avoid third parties is there on the base layer if you want it - there is no injunction to always use it.

If you were a white paper rigorist taking the option of non third-party transactions as an injunction rather than a possibility, at least 95% of what is being built in the crypto-space would be unacceptable to you. KYC/AML would just be a minor worry then, as even without KYC things as simple as most crypto exchanges, crypto-based debit cards, most crypto lending services, most crypto payment plugins for web browsers, etc would all go again your rigorist interpretation of the white paper as they require a trusted third party. So much for removing friction and driving adoption ...

In short: if one doesn’t like KYC and wants to adhere to the letter to the options given by the white paper, no problem the option is there for them to transact directly on the bitcoin blockchain and they won’t need to go through any KYC process. No one is preventing us from doing that.

But arguing that KYC shouldn’t exist on let’s say centralised exchanges because the Bitcoin base layer described in the white paper doesn’t call for KYC is incoherent, because the very concept of centralised exchange should also be removed if what the bitcoin base layer offers was to be taken as an injunction l. So someone with a coherent rigorist interpretation of the white paper would make no difference between a centralised exchange with KYC and one without KYC, and would just reject both of them for going against the white paper.

Bob24 wrote: »

What specific quotes in there do you think show that the author wanted to fight the concept KYC/AML?

You've misunderstood my post because I didn't claim that (i.e. that any specific reference was made to KYC/AML) . However, the Bitcoin blockchain network stands outside of existing systems (including that nonsense). In your post, you seem to be acknowledging that.

Bob24 wrote: »

What specific quotes in there do you think show that the author wanted to fight the concept KYC/AML?

See above. I didn't make any such claim (specific to the whitepaper and KYC/AML).

Bob24 wrote: »

But arguing that KYC shouldn’t exist on let’s say centralised exchanges because the Bitcoin base layer described in the white paper doesn’t call for KYC is incoherent

I don't see centralised exchanges as any different to banks. They're the bridge between FIAT and BTC - whilst we need them.

KYC/AML is a construct of the established financial system. It's one of many things that the Bitcoin network designs out. KYC/AML should be scrapped as per the rationale set out and listed on post # 4072.

makeorbrake wrote: »

Correction - they were actively and directly facilitating the cartels....for which they paid something like a billion and a half in fines (which probably means it was a drop in the ocean as regards the amount of money they moved for them).

Correction indeed..

HSBC was fined 1.9 bn. It's estimated at least $1 bn of drug money was laundered through HSBC's Mex accounts. The fee's on moving that cash would be relatively low compared to the amount

Therefore the fine of 1.9 bn was far in excess of any revenue HSBC made from the moving the cash.

It was discovered that HSBC Mex's compliance department was basically non-existent and they had poor money-laundering controls.

https://www.bbc.com/news/business-20673466
https://www.theguardian.com/business/2012/dec/11/hsbc-bank-us-money-laundering
https://www.reuters.com/article/us-hsbc-probe/hsbc-to-pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211

As a result they had to beef up AML and compliance.

That's something you are dead set against.

makeorbrake wrote: »

I don't want a government that I pay taxes to - playing a part in implementing this muck to facilitate sanctions! Sanctions make life miserable for ordinary people.
Otherwise, define terrorist? Apparently the militia (YPG) defending their own territory in Rohavia are terrorists. All seems to be black and white with your statist approach to this being unquestioning. They can take their KYC and shuve it where the sun don't shine.

Wow, I missed this part.

So you are against sanctions (even though most sanctions target individuals, and entities linked to those individuals or directly to the regime). Okay. And you feel pretty much the same about anti-terrorist financing laws and regulations.

So to recap here

Your view is that a financial institution..

Doesn't check anyone's identity, any one can join, any age, any background
Has no anti money-laundering measures, no financial crime fighting measures
Can't check who it gives mortgages to
Can't analyse who it provides loans to
Ignores international sanctions
Ignores terrorist financing laws

So basically the worst triple-C rated Mafia bank imaginable, is the only financial institution that is acceptable in your personal view..

That's the one you'd use, right?

Dohnjoe wrote: »

Wow, I missed this part.

So you are against sanctions (even though most sanctions target individuals, and entities linked to those individuals or directly to the regime). Okay. And you feel pretty much the same about anti-terrorist financing laws and regulations.

So to recap here

I spoke to a Venezuelan yesterday. She sends money home so that her mother has food to eat. Right now, Venezuelans earn $3/week. Food costs multiples in excess of pay rates. Medication is extremely hard to come by and at best available at western prices but more likely way beyond that. That last factor is sanctions related. That's the system you support with your 'targeted individuals'.

Dohnjoe wrote: »

So to recap here

Your view is that a financial institution..

Wrong! I said that the KYC/AML regulations - which dump all over ordinary people's data privacy should be removed - for all of the reasons listed in post # 4072. That Dohnjoe is what my view is - not this twisted concoction you're trying to present.

Dohnjoe wrote: »

That's the one you'd use, right?

My aspiration for the future is not to have anything to do with ANY bank!

Dohnjoe wrote: »

Correction indeed..

That's something you are dead set against.

The correction holds...albeit it seems you have either intentionally or unintentionally misunderstood the correction. You say this was simply a failure in terms of compliance when they ACTIVELY assisted in the process. They redesigned the shape and size of the ruddy cash boxes to facilitate them - that's how much cash was being dropped off!!!

And once again, you need to be working on a bit of acceptance of the fact that KYC/AML has been 99.99% ineffective as confirmed by a couple of different proponents of such regulation.

makeorbrake wrote: »

And once again, you need to be working on a bit of acceptance of the fact that KYC/AML has been 99.99% ineffective as confirmed by a couple of different proponents of such regulation.

It isn't confirmed at all, it's based on individual opinion. I also know individuals who work in the area, some longer than 25 years who have different opinions.

Due to it's nature it's hard to produce exact stats.

It was also pointed out to you that one individual you keep quoting supports AML and not just that, but has the opinion more AML is required - this directly contradicts your stance.

You're essentially cherry-picking individual opinions of people who ultimately contradict you.

Dohnjoe wrote: »

It isn't confirmed at all, it's based on individual opinion. I also know individuals who work in the area, some longer than 25 years who have different opinions.

Due to it's nature it's hard to produce exact stats.

You're essentially cherry-picking individual opinions of people who ultimately contradict you.

And yet you can't produce anything to validate why a regulatory and compliance system which causes this - walking all over the data privacy of ordinary people, locking millions of people out of the banking system, causing day to day friction, costing millions, holding back innovation - is worthwhile. Go figure.

Dohnjoe wrote: »

It was also pointed out to you that one individual you keep quoting supports AML and not just that, but has the opinion more AML is required - this directly contradicts your stance.

Pointed out to me? It was never in question and as I clarified (see that word 'proponent' up there?) - it only serves to strengthen my point. It can't possibly be a view coming from an anti-KYC background then, can it Dohnjoe?

It's a failure. I don't care what his recommendations are going forward. Have at it and change them. Maybe I'll change my mind on that basis but if its stomping over people's rights to transact value unimpeded - not bloody likely. And if it starts getting more anal - maybe I'll be delighted because it will drive more people to sanity check the whole 5hit5how - and potentially look at a growing alternative.

makeorbrake wrote: »

Wrong! I said that the KYC/AML regulations - which dump all over ordinary people's data privacy should be removed - for all of the reasons listed in post # 4072. That Dohnjoe is what my view is - not this twisted concoction you're trying to present.

Hmm.

Removal of KYC/AML involves the below

Doesn't check anyone's identity, any one can join, any age, any background (KYC)
Has no anti money-laundering measures, no financial crime fighting measures (AML)
Can't check who it gives mortgages to (KYC)
Can't analyse who it provides loans to (KYC)

Non-respect of sanctions and anti-terrorist financing laws involves the below

Ignores international sanctions
Ignores terrorist financing laws

So a bank doesn't know who it's clients are, or they do? or you have some half-way house?

Likewise, a bank doesn't fight financial crime or it does? or you have some half-way house?

Dohnjoe wrote: »

Hmm.

Removal of KYC/AML involves the below

Stop yer games. I've been very clear on this. I suggest that the only just approach is to remove KYC/AML regulations for the reasons listed in post # 4072.

That's it. Your banks can take whatever approach they want thereafter and you can choose your bank based on the approach that they use...because we know Dohnjoe that a upstanding statist like yourself would never have his funds sitting beside that of the disreputable, right? :rolleyes:

That's where it stops. I ain't playing with your efforts to go round the houses on this.

makeorbrake wrote: »

And yet you can't produce anything to validate why a regulatory and compliance system which causes this - walking all over the data privacy of ordinary people, locking millions of people out of the banking system, causing day to day friction, costing millions, holding back innovation - is worthwhile. Go figure.

Sure. You need to typically at least present valid ID and proof of residence when you join a financial service, because a) it's the law and b) the bank requires this, to know who you are, and also your background if they are going to provide loans/mortgages/banking services. They need to know you aren't using identify theft. That you aren't a sanctioned individual, known criminal, someone on a terrorist watchlist, etc.

When you travel, do you provide them with your passport? do you let them pat you down and search your luggage? answer personal questions from customs?

So why all this over-the-top personal hysteria over signing up for some financial service? it's probably quicker than queuing for a plane, and less intrusive

makeorbrake wrote: »

Stop yer games. I've been very clear on this. I suggest that the only just approach is to remove KYC/AML regulations for the reasons listed in post # 4072.

And replace them with what?

The fact that you keep dodging that question is very telling.

In your bank, what do I need to present to sign up. Or can I just sign up with a fake name? how does it work?

If there are no AML checks whatsoever, what do they do to stop criminals?

Dohnjoe wrote: »

So why all this over-the-top personal hysteria over signing up for some financial service? it's probably quicker than queuing for a plane, and less intrusive

The case and rationale has been laid out pretty clearly - particularly so through the points listed in post # 4072.

Dohnjoe wrote: »

And replace them with what?

You keep going and going when I've made it explicitly clear that either they don't get replaced at all or if they do get replaced, its by something that doesn't cause the issues listed in post # 4072.

I cannot be more explicit than that. Keep asking me - and you'll get the same answer.

Dohnjoe wrote: »

The fact that you keep dodging that question is very telling.

Telling of the fact that there shouldn't be governmental overstep? Absolutely. Telling of the fact that up until very recently the world functioned just fine without this nonsense? Absolutely.

Dohnjoe wrote: »

If there are no AML checks whatsoever, what do they do to stop criminals?

Illicit money movements are only a symptom of crime. I don't know Dohnjoe...you think maybe we could investigate the actual crimes that are leading to the accumulation of funds maybe? Just a thought.:rolleyes:

makeorbrake wrote: »

You keep going and going when I've made it explicitly clear that either they don't get replaced at all or if they do get replaced, its by something that doesn't cause the issues listed on post # 4072.

Well you haven't. When I asked you to detail what you'd replace bank screening and bank checks with, you refer to a list of your personal grievances with KYC and AML, that doesn't answer the question (or any of the related questions) When I asked about airports and passports, you referred to the same list.

That's dodging the questions.

Dohnjoe wrote: »

Well you haven't. When I asked you to detail what you'd replace bank screening and bank checks with, you refer to a list of your personal grievances with KYC and AML, that doesn't answer the question (or any of the related questions) When I asked about airports and passports, you referred to the same list.

That's dodging the questions.

I have!! I've told you there should be NO KYC/AML regulation - I can't make it more explicit than that. As regards you trying to drag me in to what a bank should do - that's a matter for a bank! Unshackled from the regulatory chains of KYC/AML, they are free to set their own policies.

These questions that you think I'm not answering are based on your vision on how this works - NOT MINE! Given that KYC/AML is a failure, there will be no noticeable difference when its done away with.

You can come back with the exact same nonsense and it will receive the exact same answer Dohnjoe.

As regards waywardly categorising the rationale set out in post # 4072 for why KYC/AML regulations should be confined to history, you have failed miserably to counter any of them. As an example, you suggested that the cost in time and money in implementing KYC/AML has nothing to do with the unbanked (the millions of people that are refused banking services) when it has EVERYTHING to do with it.
That's one single example.

makeorbrake wrote: »

I have!! I've told you there should be NO KYC/AML regulation - I can't make it more explicit than that.

Indeed. But you haven't provided any practical, pragmatic argument for doing so, and certainly haven't provided any (viable) solutions or alternatives

The whole thing seems to hinge on your fairly strong views on privacy. That's fine, I like my privacy too, but within reasonable and practical limits.

KYC and AML is only increasing globally, it's law in most countries, and cryptos (exchanges, custodians) are generally following suit. While you may not agree it, it's simply a reality, those are the facts. On top of that, regulators hold a lot of power. Cryptos and crypto exchanges which continue to ignore guidelines on regulation, compliance, KYC and AML - they just increase the risk that at some point in the future, action may be taken against them. I wouldn't want to be using those exchanges or holding those cryptos when it does happen

Dohnjoe wrote: »

Indeed. But you haven't provided any practical, pragmatic argument for doing so

I disagree completely - you make this wayward statement from a deeply prejudiced viewpoint. You indicated previously some link or other in your work with compliance/regulation. I'm sure it's very hard to stomach someone coming along and saying that this specific regulation is a sham. I get it - I truly do.
I have discussed this at far greater length than I ever wanted. However, the short form version of why this nonsense regulation should go is as per the list in post # 4072 .

Dohnjoe wrote: »

and certainly haven't provided any (viable) solutions or alternatives

There is NO alternative required. The world functioned just fine pre-KYC/AML and it will again. Other than that, money laundering is a symptom of criminal activity - how about the really radical idea of going after the ACTUAL criminal activity.

Dohnjoe wrote: »

The whole thing seems to hinge on your fairly strong views on privacy. That's fine, I like my privacy too, but within reasonable and practical limits.

Actually no. That's central to it for sure - that the privacy data of ordinary decent people is being trodden on. However, I've cited a whole host of other rationale as to why it needs to go.

Dohnjoe wrote: »

KYC and AML is only increasing globally, it's law in most countries, and cryptos (exchanges, custodians) are generally following suit. While you may not agree it, it's simply a reality, those are the facts. On top of that, regulators hold a lot of power.

I don't doubt that it is. I'll pull you up on the 'facts' thing as this emerged in your previous posts. What a government proposes is not always in the best interests of citizens - it seems to me that you feel you're safe to assume that - but that wouldn't be correct at all.

Dohnjoe wrote: »

Cryptos and crypto exchanges which continue to ignore guidelines on regulation, compliance, KYC and AML - they just increase the risk that at some point in the future, action may be taken against them. I wouldn't want to be using those exchanges or holding those cryptos when it does happen

Yes, crypto exchanges are no different to any other centralised financial services companies. Nobody has suggested any different.

This is going to be a long hard fought slog. However, the future is unconfiscatable and censorship resistent decentralised digital money. Once that ecosystem grows sufficiently, I - and plenty like me - will operate all but exclusively within that crypto ecosystem. At that point those of us who oppose your view won't give a fiddlers about the unjust regulation of unsound FIAT money.

I can walk into a goldsmith / jewellery shop and buy gold without ID. No KYC at all.

Bitcoin is digital gold.

Gerald Obedient Manicurist wrote: »

I can walk into a goldsmith / jewellery shop and buy gold without ID. No KYC at all.

Bitcoin is digital gold.

Your jeweller will sell you jewellery made of a gold alloy (not investment gold) and subject to VAT, i.e. a consumer goods which happens to contain some gold (but which likely costs a lot more than the value of the gold it contains).

But to buy VAT-free investment-grade gold (22K or pure gold in the form of coins and bars), to my knowledge ID verification is required. This Irish bullion dealer seems to confirm it is a legal requirement in their FAQ: https://irishgoldbullion.ie/faqs

Bob24 wrote: »

Your jeweller will sell you jewellery made of a gold alloy (not pure gold and not considered investment gold). This will be subject to VAT and is considered a consumer goods like any other which happens to contain some gold (but which likely costs a lot more than the value of the gold it contains).

But to buy VAT-free investment-grade gold (22K or pure gold in the form of coins and bars), to my knowledge ID verification is required at least for any non-insignificant quantities. This Irish bullion dealer seems to confirm it is a legal requirement in their FAQ: https://irishgoldbullion.ie/faqs

My point still stands, I can buy gold (alloy / veneer / plated or not ) without KYC. Amounts or quality don't even come into it.

If I were to sell 5 Oz of gold to a family member or friend for cash I don't need to do KYC. Likewise if I was to buy some.

It's untraceable.

Gerald Obedient Manicurist wrote: »

My point still stands, I can buy gold (alloy / veneer / plated or not ) without KYC. Amounts or quality don't even come into it.

It does matter as attested by the fact that the law treats it differently (both in terms of taxation and ID check). What you’re buying is not investment grade gold, just another consumer goods which contains gold (like your smartphone does). You would be stupid to to buy it purely as a way to invest in gold and store value as you are paying VAT on it and a *very high* premium for for the fact any it is nice jewellery. It actually shows why calling bitcoin digital gold is debatable: what you’re buying in this cas is a goods which results of an industrial use of gold and for which you are ready to pay multiples of the gold value inside it - there is no equivalent situation with Bitcoin. When people say Bitcoin is digital gold, what they have in mind is more investment-grade gold (which is a majority of the gold market).

Also even with jewellery, quantity matters in terms of ID check: go buy a 2000 euros piece of jewellery anonymously in cash and sure you will likely be fine. But if you show up in a jewellery shop and ask to buy 100000 euros worth in cash and without showing ID, I’m pretty sure most jewellers will decline to take your money without knowing who you are.

Gerald Obedient Manicurist wrote: »

If I were to sell 5 Oz of gold to a family member or friend for cash I don't need to do KYC. Likewise if I was to buy some.
It's untraceable.

Sure and likewise you can sell them a Bitcoin (about the same value as 5 oz of gold) for cash without KYC process as a direct blockchain transaction. Not sure I get the point here?

Gerald Obedient Manicurist wrote: »

My point still stands, I can buy gold (alloy / veneer / plated or not ) without KYC. Amounts or quality don't even come into it.

You are walking up to a high street shop and buying goods

You aren't signing up to a particular regulated financial service or exchange. As far as I know online gold exchange services require KYC

High street or not, I can do it without KYC.

We can go round in circles for days here.

If you have multiple ledgers and a heap of Bitcoin, you're anonymous.

Once you're past the first wallet you're laughing.

Gerald Obedient Manicurist wrote: »

High street or not, I can do it without KYC.

We can go round in circles for days here.

It's perfectly understandable

Buying something in a store on the high street is different from signing up to an international precious metals exchange that is potentially subject to particular laws and regulations

Think.

Dohnjoe wrote: »

It's perfectly understandable

Buying something in a store on the high street is different from signing up to an international precious metals exchange that is potentially subject to particular laws and regulations

Think.

Bitcoin is therefore a more accessible store of value. A no brainer really.

Gerald Obedient Manicurist wrote: »

Bitcoin is therefore a more accessible store of value. A no brainer really.

*Speculative* store of value, and there are still enough non-KYC exchanges if people want to take that risk. Hell, I remember the days we would buy it on forums/message boards. I bought one alt-coin from a guy with a decent rep on a popular social media site.

More laundering within the gold market. Bitcoin fixes this.

https://www.reuters.com/article/us-gold-swiss-fakes-exclusive/exclusive-fake-branded-bars-slip-dirty-gold-into-world-markets-idUSKCN1VI0DD

Gerald Obedient Manicurist wrote: »

We can go round in circles for days here.

As if. That would never happen!

Dohnjoe wrote: »

Speculative store of value

Bitcoin is in the emergent and formative stages of development as a store of value. But yes, its an asset class subject to speculation.

Gerald Obedient Manicurist wrote: »

More laundering within the gold market. Bitcoin fixes this.

https://www.reuters.com/article/us-gold-swiss-fakes-exclusive/exclusive-fake-branded-bars-slip-dirty-gold-into-world-markets-idUSKCN1VI0DD

Dead right. One of the key traits of a good store of value is verifiability. Bitcoin scores above Gold and FIAT on that characteristic.