Will Hive/Leofinance Require KYC in Future?
Introduction
KYC also known as Know Your Customer is a check that is usually required to know about customers or clients by getting their necessary information and documents. It is usually done in traditional financial services in case of any suspicious activities like money laundering or to keep track of their customer database.
The sole purpose of the KYC is to help financial services get to verify their clients by filling in their information and when filled, they have to verify the information to make sure they are correct. For example, when a client or customer needs a loan from a bank and an address is filled, the customer service officer in charge will have to visit the address to make sure that the address is correct or matches the one filled.
However, there are some decentralized exchanges that also use KYC on their platform like Binance for example when registering or before you complete any trade, you will have to pass through some verification checks like a face scan, filling in your bank details and submitting a valid ID card like passport, National ID or driving license before you will be able to do any transaction.
The Purpose of KYC in the crypto Industry
Money laundering is a common practice in any financial industry and the people who launder the money are often caught when they try to do it through the normal traditional way crypto being decentralized has become an easy way for them to launder money. With KYC it can help reduce any possible means of money laundering that may come up and it also helps to know that the customers themselves can be trusted and not carry out fraudulent activities on the platform and if carried out it will be easy to identify and track.
Purpose of KYC in Hive/Leofinance
With KYC:
it can help reduce mass account creation that frequently arises on the platform, and this mass account creation is due to when a user has plagiarized and in order to escape punishment or do the necessary amendments they open another account.
It can help stop the milking of rewards, where one person posts from two or three different accounts in order to accumulate the tokens/rewards. I do understand some have two accounts for different purposes, one can be based on their passion and the other can be based on general activities.
Believe it or not, KYC can help prevent theft of accounts and money laundering on the platform.
Summary
At the end of the day, it might not be possible to have KYC on Hive/Leofinance because that would be acquiring user data and the management of users' data isn’t that easy, also Hive/Leofinance platform is decentralized there is no need for that (I guess).
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I guess the real question, then, is whether it is possible to operate some kind of KYC (ideally of an ephemeral nature) while still maintaining decentralisation and privacy.
Guess that's be the real question but it can be possible after all they've implemented verification through receiving SMS code
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Or is that any different?
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What about the anonymity that many blockchain users seek/wish to have?
Hive, with its plan word account names, is very transparent. Maybe even too transparent since there are notions to enable non-telling account names/addresses.
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Wouldn't it be possible to have the anonymity but still pass through the KYC criteria for the platform?
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Do you mean anonymous for the public and known (KYC) for the business owner and regulator?
In the case of Hive, I even don't know who the owner is :) Legally speaking. Because the must be a legal entity in order to be able to have intercourse with the regulator.
I am not telling that I like/endorse the idea of known/defined ownership. I am just saying how the authorities think. They are corporate entities in the end. Their final aim is to control and not to be beneficial to the end user.
They report to the powers above them, not to the minions below.
The whole idea behind decentralization and anonymity is to beat this system of control, of pyramid ownership, of 1% against 99% scheme.
Hive will not. It isnt needed since being non-KYC has no ramifications.
Leofinance could be forced into it unless it decentralizes and makes the code open source. Then it would be equally as fruitless.
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This may be out of it but I just need to understand something.
I know Hive/Leofinance is decentralized and all but what are the security measures to prevent money laundering because it's possible it can be used for it right?
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