Published on: 2015-08-31T11:28:23+00:00
The email thread discusses a proposal made by Prabhat Kumar Singh on the bitcoin-dev mailing list to create an AML-KYC module for controlling the Bitcoin network and qualifying use cases in an OFAC compliant way. The proposal receives mixed feedback, with some members opposing centralized authority and advocating for decentralized principles. Others argue that implementing AML-KYC measures should be optional and sit on top of the Bitcoin protocol rather than being integrated into it. In order to enforce universal policies for anti-money laundering (AML) and know your customer (KYC) requirements, a system of third-party checkers may be necessary in each country, according to the recipient. This would involve implementing an identity verification system and additional fees for maintenance. The recipient also highlights the potential issue of individual coins becoming tainted with previous ownership details, leading to blacklists and rendering some coins worthless. Furthermore, they caution that there could be criminal liability for ineffective AML-KYC procedures.A proposal was made in 2015 by Prabhat Kumar Singh on the bitcoin-dev mailing list to create an AML-KYC module that would control the bitcoin network and qualify use cases in compliance with the Office of Foreign Assets Control (OFAC). The aim of this proposal was to regulate the flow of funds through the network and mitigate the risks associated with money laundering. The recipient includes a link to a Reddit post from 2013 that discusses similar issues with bitcoin, as well as the Bitcoin Foundation's Law and Policy Committee.The proposed AML-KYC module outlined in the document specifies how mining and transactions in sanctioned countries should follow OFAC regulations within the bitcoin network. The motivation behind this proposal is to prevent the misuse of bitcoin's vast financial power, which has the potential to fund illicit activities such as terrorism, human trafficking, drug trafficking, and rights abuse. The central idea is to establish a bitcoin account controlled by the Bitcoin Foundation, acting as a fair play party and enforcement body. To achieve this, 0-sum transactions with a Memo Flag of BLOCK or ALLOW would be conducted, with empty memo transactions having no impact. While the new consensus protocol may not be favored by some nodes for various reasons, it is seen as a means to naturally clean up the bitcoin protocol from illicit miners and users. The implementation of this proposal is currently underway.
Updated on: 2023-08-01T15:41:53.780178+00:00