As governments around the world grapple with whether and how to regulate cryptocurrencies, publicly traded exchange Coinbase seeks to guide policymakers in crafting regulations that protect consumers but benefit institutions. and crypto-natives.
“What we’re trying to do is find a path that allows crypto innovation to continue to drive,” said Kara Calvert, head of US policy at Coinbase. Decrypt. “We want to make sure that DeFi (decentralized finance) is not killed in its infancy.”
Ever since public awareness of Bitcoin, DeFi, and cryptocurrencies took off during the 2016-2017 bull market, regulators have had to play catch-up and try to apply decades-old laws to new technologies. . Many in the space have chafed at government regulation and see know-your-customer (KYC) policies as an invasion of privacy that creates honeypots for cybercriminals.
Calvert said the key to allaying those concerns is cooperation.
“I think what we need to do is create rules of conduct,” she said. “One thing the industry as a whole could do a better job of is getting input from ‘degens’ and DeFi projects to make sure the policies work for them and don’t box them in or create no obstacles.”
Unpopular Opinion: KYC is an ineffective way to catch money laundering and crime, and creates moral hazard of all innocent people’s data caught in the net. This data will be stolen and used against innocent people. The paradigm creates more crimes than it stops.
Launched in 2012, Coinbase, the largest US-based cryptocurrency exchange, went public in 2021. Since then, the company has been under tougher regulatory scrutiny.
Calvert says Coinbase welcomes the regulation but “we just want to improve the regulation.” One area of regulation that remains a point of contention for crypto natives and privacy advocates is KYC policy.
See the correct analysis of this news is that AML/CTF and KYC do not work. They will never work because they are trying to control the *tool* not the *criminal act*. It is not the money that is illicit, it is the use of that money to commit crimes.
KYC and Anti-Money Laundering (AML) are financial industry practices that ensure that a customer’s identity can be verified and therefore used to help prevent or prosecute financial crimes.
For example, US banks and regulatory agencies like the Securities and Exchange Commission (SEC) require customers to provide detailed financial and personal information before opening an investment or bank account – something crypto firms and DeFi traditionally do not.
“There are people who won’t want to comply with KYC, and they’ll go elsewhere,” Calvert said. “I think that means the United States can use crypto safely, and because of that, there are rules to go with it.”
Stay up to date with crypto news, get daily updates in your inbox.