Hacker News Reader

Comment by kobayashi | Hacker News Reader

Almost equally bad.

Perhaps we can quash the notion that financial privacy is "bad". Anyone who deals with international finance knows that KYC compliance is a joke and the required submission of sensitive personal documents to third-party companies is a major contributor to identity theft and fraud. Indeed, identity fraud is in many ways a product of policies that force companies to collect this data.

Nor is there any sensible moral argument for why companies should impose burdensome and disproportionate identity checks on customers who value their financial privacy. It is unfortunate to see this sort of comment on a site devoted to entrepreneurship.

I don't deal with international finance but I do deal with payments within the US and I have to say I really disagree with you on KYC. Our KYC process absolutely prevents fraud from happening, and because we are liable for any transactions we process I can't imagine operating without it.

> absolutely prevents fraud from happening

I'm trying to find a generous reading for this. Perhaps, "sometimes reduces the amount of fraud that impacts customers"?

I think you're misreading my use of the word absolutely. I was responding to the idea that KYC compliance is a joke. It is absolutely useful, that does not mean it prevents 100% of fraud absolutely.

Sure, but don't for one second pretend its ever for the convenience of the customer or any of that sort of nonsense. It's very clearly for your bottom line and for the government's ability to track financial movement.

Most customers find it convenient that the exchange they use doesn't abruptly get all its (and by extension, its clients') assets seized by government officials for not complying with financial regulations.

Obviously security will always come at a convenience cost, and if by "my bottom line" you mean "not losing money to fraud" then yes, duh.

Lol absolutely prevents fraud from happening? That is impossible. KYC is more of a cover-your-ass requirement rather than fraud prevention.

With millions of SSN and personal information being available after numerous breaches from health care, etc how exactly are you supposed to vett someone's identity over the Internet?

> KYC is more of a cover-your-ass requirement rather than fraud prevention.

Keister: Yours Covered.

I think you're misreading my use of the word absolutely. I was responding to the idea that KYC compliance is a joke. It is absolutely useful, that does not mean it prevents 100% of fraud absolutely.

> With millions of SSN and personal information being available after numerous breaches from health care, etc how exactly are you supposed to vett someone's identity over the Internet?

I can't really get into our entire KYC and fraud prevention process, but I'll just say there are many more ways to vet someone's identity then simply asking for their SSN.

KYC is a joke. If you have information external to KYC for fraud prevention, that's something altogether different from KYC. The KYC requirements themselves are a joke and provide nothing in terms of verifying identity.

I think I probably agree with your general point that the mandated KYC practices are not enough to protect you and your stakeholders in and of themselves. That being said, I think you'd be surprised how much fraud fails to get through basic KYC checks. (I did not downvote you fwiw).

I'm very familiar with KYC, and fraud, etc. There's more than enough fraud that passes KYC to bankrupt your company. It's the additional work that keeps most companies of significant size in business.

"the required submission of sensitive personal documents to third-party companies is a major contributor to identity theft and fraud."

Citation needed.

I don't think it's equally bad because people should be anonymous when banking with bitcoin. I meant that wildly different application of rules is the bad thing.

More importantly, if a business has rules meant for financial security, compliance is important. An organization that institutionalizes non-compliance as a norm is seriously problematic.

Yes, I become suspicious at some point. and then it made a bit comfortable doing it, holding and using their services more.

Reply on news.ycombinator.com