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Comment by wdewind | Hacker News Reader

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.

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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?

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.

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

Keister: Yours Covered.

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.

> 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.

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