KYC (Know Your Customer) procedure is extremely important as it enables organizations to get to know their clients’ identity before or while doing business with them. Through the KYC procedure, businesses can assess whether particular clients of theirs are involved in illegal activities such as corruption and money laundering operations. If found to have facilitated such illegal transactions, the business can even get a court order for closure or indictment.
MyEtherWallet & Bity
One particular cryptocurrency wallet, MyEtherWallet (MEW) collaborates with Bity, a finance firm, in converting cryptocurrency to fiat even without KYC requirements. MEW itself announced the news about their controversial platform in a blog post of theirs on Feb. 20. In fact, as per the announcement, MEW V5 wallet was capable of exchanging as much as $4995 worth of Bitcoin (BTC) and Ethereum (ETH) into Swiss Francs and Euros even without KYC procedures. Besides, the exchange service is offered worldwide.
So far, the problem of governments and regulators is the private and anonymous procedures of exchanging cryptocurrencies. This is because such privacy is often linked with crimes like money laundering. In fact, the Cyberspace Administration of China, or CAC, is doing much better as it has new regulations when it comes to blockchain firms. As CAC works, authorities will have access to stored data as well as the registry data. Thus, authorities will be able to oversee private content and can make decisions to suspend transactions if these violate Chinese laws.
Amazon Technologies Inc. have developed a similar platform in April 2018. This platform combines multiple data sources in order to track individual users’ cryptocurrency transactions in real time. Eventually, cryptocurrency transactions will not remain anonymous anymore.