KYC/AML is ineffective

[NotATether]

There is now indisputable evidence that the current implementation of KYC/AML requirements are doing more harm than good.

Let's take Europe as an example:

There is a lot of crime, fraud, and terrorist financing happening in the EU. One study has it at several billions of euros a year. Another article shows that only a measly billion or so are actually stopped by KYC/AML measures, which means that over 99% of criminal activity is not caught by KYC/AML checks.

Meanwhile the total money spent on ensuring KYC/AML compliance is almost 150 billion euros a year:



It's bad news for service owners and customers because the owners have to waste so much money on tech that can't even stop a large percentage of fraud, and the customers are denied services for various geographical or identification reasons and also put their identity at risk by storing it with many different providers.

Meanwhile the criminals continue to celebrate.

[Husires]

scammers cannot stop scam and look for a full-time job, and banks cannot tighten regulatory procedures. At some point, they are looking for profits, so whoever complies with certain regulations will be able to use banking services, and fraudsters comply with many regulations.
false positives One of the things and some governments allow a minimum of money laundering or do not care about it much. some customers are gullible that makes them believe all scam offers on the Internet.
I know a friend who still believes Click to Win Millions Scam ads.

[TomPluz]

It's bad news for service owners and customers because the owners have to waste so much money on tech that can't even stop a large percentage of fraud, and the customers are denied services for various geographical or identification reasons and also put their identity at risk by storing it with many different providers. Meanwhile the criminals continue to celebrate.

The government side is just pretending that KYC/AML is doing fine so that they can continue on imposing the whole draconian measure to their subjects. The burden is really on the side of the service providers and they have no choice but to obey otherwise it can be so difficult doing business if you are at odds with the government. With eh data already available making KYC really ineffective and generally worthless, the government has to come up with better measures that can be more acceptable to those doing business and the consumers, otherwise this can be liken to just burying our heads in the sand. Criminals all know how to find weaknesses in any system and they got the latest and effective tools to circle around KYC/AML measures...and yes they are laughing right now.

[Wiwo]

KYC and AML are both infective globally and as a matter of fact the government is vulnerable in most cases, because just as you mentioned about terrorism financing Sam or even worst case is happening currently in country,  while the government through several restrictions limits it citizens in how much the have access to in terms of finance to avoid money laundering,  still yet there are huge percentage of terrorism financing which pass through the financial sectors and without a trace.

This is a compelling situation,  and for the fact that we face high risk of vinurability in the future, we as citizens must continue to act smartly to avoid being caught in between making out own security a high priority a d knowing when to shot the door on centralized financing.

[Tribalchief]

There is now indisputable evidence that the current implementation of KYC/AML requirements are doing more harm than good.

Let's take Europe as an example:

There is a lot of crime, fraud, and terrorist financing happening in the EU. One study has it at several billions of euros a year. Another article shows that only a measly billion or so are actually stopped by KYC/AML measures, which means that over 99% of criminal activity is not caught by KYC/AML checks.

Meanwhile the total money spent on ensuring KYC/AML compliance is almost 150 billion euros a year:

It's bad news for service owners and customers because the owners have to waste so much money on tech that can't even stop a large percentage of fraud, and the customers are denied services for various geographical or identification reasons and also put their identity at risk by storing it with many different providers.

Meanwhile the criminals continue to celebrate.

They've (government) succeeded in rapping the majority up in a world of illusion and delusion, by making them feel the importance of something, when it is not actually important. KYC verification has now become part of every centralized organization not because they know what it truly defines, but because the government has pressured them in doing so. If KYC/AML are ineffective, then why still make heavy budget for it, except there are certain things they are not telling us. Tough criminals who launder heavy money won't attempt to use any medium that operates on KYC, and the government strongly know about this. They choose to track down those minor criminals and proclaim that their effort is effective when it is not.

After watching a documentary recently, I realized that this people (government) are just interested in our personal lives( not to help us, but to spy on things that can help us). They believe that an average citizen should have a specific amount in his/her account, and not more than. When someone eventually receive something big, is either the account is blocked, or the owner is tracked, even when the money is in no way related to theft. Shameful 

+1 by the way.

[libert19]

KYC/AML may be ineffective but there is no better solution, so people stick with what's available, when there is better solution available, people will surely opt for that over current measures.

p.s: Have used several unique identity verification services in crypto, but those are useless as well.

[Zed0X]

I'm not surprised because fake IDs can be accepted as proof of identification. With a weak verification system like that, money launderers and scammers will continue with their fraudulent activity as usual. I guess these platforms need to spend more to increase the effectiveness?

[0t3p0t]

KYC and AML hurts legitimate people it violates personal privacy and just because of these scammers it was all implemented when a data breach will happen all personal information might be leaked and compromised and we are nowhere to complain. I personally don't like it myself but since I am a law abiding citizen I have to comply and now my privacy lies to people I do not know and systems that could be vulnerable to attacks while scammers are loose and free.

[Aanuoluwatofunmi]

There is now indisputable evidence that the current implementation of KYC/AML requirements are doing more harm than good.

You're right, upon the fulfilment of all the terms and conditions that goes in line with the request on KYC and AML verification procedures, we still have people looting money and they are not being caught, fraudulent activities are increasing and many are not finding solution to it because even the financial agency in control of financial crime couldn't help the situation, yet they are considering the crypto scam rate where it is nothing to be compared to the fiat losses we have been seeing, are the regulatory institutions not being effective enough, because all the KYC requirements seems in effective as well in tackling financial crime.

[Sarionadukecom]

There is now indisputable evidence that the current implementation of KYC/AML requirements are doing more harm than good.

You're right, upon the fulfilment of all the terms and conditions that goes in line with the request on KYC and AML verification procedures, we still have people looting money and they are not being caught, fraudulent activities are increasing and many are not finding solution to it because even the financial agency in control of financial crime couldn't help the situation, yet they are considering the crypto scam rate where it is nothing to be compared to the fiat losses we have been seeing, are the regulatory institutions not being effective enough, because all the KYC requirements seems in effective as well in tackling financial crime.

Seems scammer ar becoming smarter. But I'll also posit that regulatory bodies ain't doing their job effectively..

[nakamura12]

People don't have a lot of choice to choose but to choose what is available in order for them to be safe and even though the measures aren't completely safe at all like you said about information/identities being kept safe by other providers or other third party. Even some people use casino to implement KYC/AML to scam people off of their money like they violate their rule and they have the authority to take the money and won't be returned to the person who it belongs to.

[Vx1]

Every system has weaknesses, and that's where criminals enter and commit their crimes. 
In my opinion, KYC/AML is correct to deal with these violations, but it is only because criminals or fraudsters have taken advantage of the loopholes so they are not caught.
Therefore, the relevant agencies must work even harder, so that all problems like this can be resolved immediately.

[dkbit98]

This is like having a ship in sea with thousands on holes in the bottom and water in leaking inside, and KYC government regulators are trying to close just one hole and they are telling us how this will stop the ship from sinking. 
All this KYC regulations for me is one big security theater, they know they can't stop any criminals like this, they just want more censorship and control of their citizens.
Silly excuse is that they are using KYC for our safety... as if we need more cameras, more taxes and more regulations.

[bee]

Criminals could also have intellectual backgrounds, so they know the loopholes. Never mind avoiding AML compliant services, in reality the KYC system can also be manipulated and criminals are still free to use those services.
I remember one of the CZ cases, where he allowed Chinese residents (who should be restricted) to use his exchange through insiders.

[NotATether]

Criminals could also have intellectual backgrounds, so they know the loopholes. Never mind avoiding AML compliant services, in reality the KYC system can also be manipulated and criminals are still free to use those services.
I remember one of the CZ cases, where he allowed Chinese residents (who should be restricted) to use his exchange through insiders.

And the case where two brothers who went to MIT and got a bachelors degree in mathematics and I think computer science went into the Ethereum blockchain and hacked it for millions of dollars. How did they even do that anyway?  Because the way I'm familiar with things, transactions are supposed to be final once broadcast (and in Ethereum's case cannot be replaced by another).