We have 4 days to contest KYC being required by internet services
federalregister.gov
federalregister.gov
It seems a bit benign and I don't understand the parallels others on this HN discussion are making. Is it that it's a slippery slope or perhaps I'm being naïve in regards to the scope?
But that also doesn't mean this legal mitigation is either useful or worthwhile.
Not that that makes this all okay, but it is a much more limited proposal than "internet services" makes it sound.
https://www.coindesk.com/policy/2024/04/24/samourai-wallet-f...
This comes amid a war on end-to-end encryption, and so on. It's not like they are going to stop here.
(e) The term ‘‘Infrastructure as a Service Product’’ means any product or service offered to a consumer, including complimentary or ‘‘trial’’ offerings, that provides processing, storage, networks, or other fundamental computing resources, and with which the consumer is able to deploy and run software that is not predefined, including operating systems and applications. The consumer typically does not manage or control most of the underlying hardware but has control over the operating systems, storage, and any deployed applications. The term is inclusive of ‘‘managed’’ products or services, in which the provider is responsible for some aspects of system configuration or maintenance, and ‘‘unmanaged’’ products or services, in which the provider is only responsible for ensuring that the product is available to the consumer. The term is also inclusive of ‘‘virtualized’’ products and services, in which the computing resources of a physical machine are split between virtualized computers accessible over the internet (e.g., ‘‘virtual private servers’’), and ‘‘dedicated’’ products or services in which the total computing resources of a physical machine are provided to a single person (e.g., ‘‘bare-metal’’ servers)
(https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021-0...)
"U.S. IaaS providers and foreign resellers of U.S. IaaS products must exercise reasonable due diligence to ascertain the true identity of any customer or beneficial owner of an Account who claims to be a U.S. person."
So at a minimum, everyone's identity is verified by IaaS provider. If you claim to be a non-U.S. person, additional information is collected.
They mention looking at comments from a previous proposal in 2021, "Taking Additional Steps To Address the National Emergency With Respect to Significant Malicious Cyber-Enabled Activities" https://www.federalregister.gov/documents/2021/09/24/2021-20...
Who counts as IaaS besides Amazon, Azure, and GCS?
This effort will end anonymity on the internet. For everyone.
Crypto was just the beginning. Next is end-to-end encryption. And it's going on worldwide, not just in USA:
https://community.qbix.com/t/the-coming-war-on-end-to-end-en...
-------
Infrastructure as a Service product
or
IaaS product
means a product or service offered to a consumer, including complimentary or “trial” offerings, that provides processing, storage, networks, or other fundamental computing resources, and with which the consumer is able to deploy and run software that is not predefined, including operating systems and applications. The consumer typically does not manage or control most of the underlying hardware but has control over the operating systems, storage, and any deployed applications. The term is inclusive of “managed” products or services, in which the provider is responsible for some aspects of system configuration or maintenance, and “unmanaged” products or services, in which the provider is only responsible for ensuring that the product is available to the consumer. The term is also inclusive of “virtualized” products and services, in which the computing resources of a physical machine are split between virtualized computers accessible over the internet (
e.g.,
“virtual private servers”), and “dedicated” products or services in which the total computing resources of a physical machine are provided to a single person (
e.g.,
“bare-metal servers”).
---
So Dreamhost counts, any web host where you can run arbitrary PHP code would count. Wordpess.com -- where you cannot actually modify the PHP code yourself -- would not count as IaaS. But any web host that allows you to install applications on your own, or run any of your own code, would count as IaaS by this regulation.
However, I am able to write a WP plug-in and install it on my Wordpress.com account. In that case, I am modifying PHP code and running it. Sure, it might not do "AI" stuff but it can do some stuff and I'm assuming that the law would transmute over time to include stuff other than "AI" stuff.
> provides processing, storage, networks, or other fundamental computing resources, and with which the consumer is able to deploy and run software that is not predefined, including operating systems and applications
> The consumer [...] has control over the operating systems, storage, and any deployed applications.
That was just a snippet of the full definition here:
First, the rule applies to WordPress and all that kind of thing, and then providers would have to KYC WordPress users. Which is a reason not to pass it.
Second, the rule is completely pointless, because it doesn't, and then anyone could create an AI training WordPress plugin that uses whatever arbitrarily fast hardware the server has and thereby easily bypass the rule. Which is a reason not to pass it.
If you skim the full context of this proposal and the topics it focuses on (dedicated servers, virtual servers, AI acceleration), and you've been paying attention to current geopolitics in these areas (top chips being sanctioned), it is completely obvious that goal here is to prevent things like evading sanctions by renting hardware instead of buying it.
I suppose every company and every service should be in scope for KYC then. /s
But the reality is that Wordpress hosts are not in the business of renting people dedicated servers the price of a nice house. And if they were asked to do so, it wouldn't be a simple automated request without scrutiny.
The latter is one of the reasons rules like this are simultaneously so expensive and ineffective. Provider A decides to KYC everybody because they're big and risk averse, so the rules inconvenience millions of innocent people. Provider B wants to make money selling GPUs to foreigners, so they implicitly choose a structure that allows that to happen if the rules contain any loopholes whatsoever. (This ignoring that foreign customers could just switch to foreign hosts and cost US companies business for no reason.)
And if the premise is the level of resources being consumed rather than the type of service then why don't the rules exempt anyone spending less than e.g. $50,000/month? That would be almost everyone while still not being anyone buying enough compute to do major AI training. It still wouldn't work but at least it would have much less overhead.
> $50,000/month? That would be almost everyone
It might be almost every individual developer. But that isn't really a huge cloud spend at all for an organization.
https://www.cloudzero.com/wp-content/uploads/2023/10/flexera...
But speaking of loopholes, what do you think bad actors would do if you told them that they weren't subject to KYC under a certain dollar amount? lol
That's kind of the point. It excludes all of the individuals and small businesses and makes it unambiguous that it doesn't apply to someone paying $10/month for a VPS to use as a VPN endpoint for privacy.
> But speaking of loopholes, what do you think bad actors would do if you told them that they weren't subject to KYC under a certain dollar amount?
In some hypothetical world where the rules were actually effective? Spend $49,000 and then create a new account, which would be highly suspicious and still cause them to get caught.
In practice? Use a cooperative provider (Wells Fargo as a hosting company), or one in another country, the same as they would do regardless.
I'm thinking that this will simply promote cloud providers that operate outside America, sort of like Binance and FTX were "forced to exit" the US market. Not a bad result.
AWS Lambda would clearly (IMO) be in-scope as IaaS by this definition, as an example, even though I can’t install another OS.
In the full context, it is quite clear it is targeting things like EC2, dedicated hosting, etc.
https://www.federalregister.gov/d/2024-01580/p-46
I don't think it's reasonable to read this as if MS Excel qualifies as an IaaS.
Vultr, for example.
There are high-quality IaaS providers that accept bitcoin for payment, allowing someone to host a server on their platform without revealing their identity.
You are correct. "Account must be funded by credit card or PayPal before making a Bitcoin deposit." No more anonymity on Vultr.
With that said, I also don't understand the issues people are having with this.
But also, the people with unsubscribe links now but not in 2002 would still commonly send their messages from a consistent address, making it easy to block them if you wanted to, and making even primitive spam filters highly effective against them. Meanwhile the people who randomize their from address to prevent this are the people who still don't have a functioning unsubscribe link.
The regulation "requir[es] U.S. Infrastructure as a Service (IaaS) providers of IaaS products to verify the identity of their foreign customers"
Q: How would one propose to determine if a customer is foreign or not?
A checkbox, perhaps? <rolls eyes>
No bad actor would possibly pretend to be a domestic customer, of course... <rolls eyes again>
OK, I'll bite. How exactly are [US] domestic users of services supposed to prove they don't need to prove their identity?
EDIT: it reminds me of the Common Travel Area (between Ireland and of the United Kingdom of Great Britain and Northern Ireland), which has some glorious inconsistencies. For instance that nationals of Ireland and the UK travelling between those two countries do not need a passport, except when you take an international flight and rock up at IE/UK border control it's fairly hard to prove you are a national who doesn't need to provide a passport without having ... a passport (or equivalent ID).
I signed up for a Mercury bank account a few months back for my Delaware corporation without talking to anyone, so I'll use that as a template.
I can't remember the exact steps, but tl;dr submit a passport photo / driver's license photo and a photo I take in the app itself. If it was a not-US passport, then they'd dig into a full verification, not just a quick manual check of "is that face the same as the passport/license, is the passport/license ID # valid, and are the photos edited"
That is a reasonable and factually accurate statement.
> There's always tradeoffs, I respect people's concern about them, and I wish there was a gentler to say it.
The tradeoff here is astonishingly bad. Studies have shown that AML/KYC have an effectiveness of less than a fraction of one percent. They continue to proliferate because their largest costs fall on the users rather than the companies, so they're the thing that large corporations suggest as a "solution" when they're being pressured to do something. Because people have the perception that it will do some good, even though that perception is inaccurate.
In reality what they do is provide a means to satisfy "something must be done" in a way that dumps the costs on marginalized users instead of politicians and corporations.
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
AML laws are completely ineffective. People can write long papers about why, but the underlying reason is simple. Money is fungible.
If Alice is selling heroin to Bob and the government knows this, they don't need AML laws to arrest them. If they don't know this, even if all of the financial records were 100% transparent and tied to the name on their birth certificates, they still wouldn't know this, because Alice and Bob would just claim the payment is for software licensing or personal grooming services or whatever they want to make up, and neither the bank nor the government has any way to know otherwise until they independently prove the underlying crime. Worse, Alice and Bob don't even have to pay each other. Bob can just buy whatever Alice asks him to with his money and then give that to Alice in exchange for the contraband. Then there is no financial transaction linking them at all.
The entire concept of it simply doesn't work. It's all cost and no benefit.
So what else did they pull off your phone? Location data, personal photos, personal files, wifi connections near by, microphone data, ongoing location data?
Have you validated that they didn't take the other bits off your phone?
The check is very much "don't stop walking but hold your ID-looking thing in your hand so a nonchalant man can glance at it". You would attract very little attention with someone else's UK or Irish driving license, a bit more if you decided to test the waters with a weird form of ID.
Children can travel with a birth certificate (no photo).
You need more than this to get on an aeroplane, but that also applies to domestic flights in the UK.
If you get the boat and show eg. a Romanian student card, they might ask you where your passport is, somewhat reasonably since you would have needed it to travel to the UK or to Ireland. They would accept an ID card probably and might let you in with legit looking non-government ID.
That's the sea border. You can cross the land border between the Republic of Ireland and Northern Ireland without any form of ID at all, government-issued, photographic or otherwise. Lots of people do it every day by car or bus and it would not remotely occur to them to take ID with them.
So the Romanian student would have no problem travelling between London and Dublin without showing anything since they could get a boat Glasgow- Belfast and then get a bus to Dublin.
If this was your best example of governments lying and changing the rules, it's not a very good one (and is also kind of offensive to Irish and British people).
Can you clarify what you mean by "more than this"?
I've travelled on many domestic flights within the UK, and ID is not routinely checked.
> If this was your best example of governments lying and changing the rules
Ouch.
The common travel area has its origins way back in 1923, the rules are clear, no-one is lying.
It's just that it's hard to prove you are entitled to its benefits without having an ID document with you that - if you're entitled - it says you don't have to have with you...
You are suggesting that having to show any photographic ID is the same as having to show a passport. That's obviously silly.
No one has to prove that "they are entitled to not show a passport" by showing British or Irish ID. This is a fantasy.
On the boat everyone, British, Irish or other, has to show ID of some kind. No one has to show a passport. At the land border no one has to show anything.
"a spokesperson for the CAA, said: “UK aviation security regulations do not require a passenger’s identity to be checked for security purposes prior to boarding a domestic flight, in the same way when travelling within the mainland on a train or bus. Any further requirement on behalf of the carrier to provide identification may be a condition of travel by the carrier itself.”"
https://www.independent.co.uk/travel/news-and-advice/british...
You need government ID to get on a domestic flight in the UK. You also need government ID to get on a flight from the UK to Ireland.
As with the sea border and the land border, this completely invalidates your claim about what ID is required to travel between the UK and the Republic of Ireland.
You don't appear to have travelled between the UK and the Republic of Ireland, ever, or to have flown domestically in the UK since 9/11. You stated above that "they do not check ID on UK domestic flights", not "the CAA does not require ID but all airlines do". The first statement is untrue. Not sure why you are making stuff up in support of an urban legend about the UK/Irish border.
Even if there was a difference between the ID required to board a flight from the UK to the RoI and the ID required to board a UK domestic flight (there isn't - both require govt ID, not necessarily a passport), the situation at the boat and at the land border completely disproves your original claim.
> (i) any model that was trained using a quantity of computing power greater than 10^26 integer or floating-point operations, or using primarily biological sequence data and using a quantity of computing power greater than 10^23 integer or floating-point operations; and
> (ii) any computing cluster that has a set of machines physically co-located in a single datacenter, transitively connected by data center networking of over 100 Gbit/s, and having a theoretical maximum computing capacity of 10^20 integer or floating-point operations per second for training AI.
Keep in mind that most consumer graphics cards are in the _teraflops_ range, which is 10^12. It's hard to imagine this affecting the average person, it seems that they are specifying KYC for people using clusters with thousands or tens of thousands of cards.
Something like 40 of them, or 100-300 if you're looking at FP16. So well over 2^14.
And that's per second, give it your idle cycles for four months and that's 10^7 seconds.
It gets pretty close to 10^23.
They require all IaaS[1] to determine if customers are US persons, and if not to collect and retain certain identifying information[2], and provide annual reports describing their processes[3]. It grants the Secretary of Commerce extra-judicial power to force any IaaS to stop doing business with any foreign customer, or place restrictions on their use[4]. This section lists things that the Secretary should consider in doing so, but doesn't have any hard requirements. Finally, it requires the IaaS to report certain foreign use of AI[5].
[1]§7.301 https://www.federalregister.gov/d/2024-01580/p-189
[2]§7.302 https://www.federalregister.gov/d/2024-01580/p-219
[3]§7.304 https://www.federalregister.gov/d/2024-01580/p-266
[4]§7.307 https://www.federalregister.gov/d/2024-01580/p-377
[5]§7.308 https://www.federalregister.gov/d/2024-01580/p-403
This can backfire, as foreign customers of public clouds may switch to local providers, which erodes the US near-monopoly on cloud services. Ironically this can reduce the visibility and control the US government has over foreign nation states.
E.g.: most of the Australian government is hosted in either Azure or AWS. That kind of thing might stop if extrajudicial power is granted to pull the plug on any customer on any time.
In other words, if you want to run your own Wordpress, or Mastodon node, or your own custom CMS web site or group chat or IRC or bitcoin node, you would need to reveal your identity to the hosting service that you want. This does seem quite bad and could obviously be used to identify political dissidents.
On top of that, the IAAS must report to the US Commerce department about foreigners who are using services to train large AI models.
This proposed rule looks to me like it basically requires providers to come up with their own verification plans, which may then differ from provider to provider, so as to be "flexible and minimally burdensome to their business operations".
[note for the following: I am not a lawyer. The following is not legal advice. Do not fold, spindle or multilate. Do not taunt Happy Fun Ball.]
The real danger, I think, with things like this is, there's an executive order that was issued, but it further specified a rulemaking process be conducted to determine the actual regulations that define compliance. The link in the title is to the proposed rule. There's nothing that says any amount of prior public input will necessarily influence the details of the final rule, or that rule can't change in the future through another rulemaking process, and if it does the only way to challenge it is either to sue the agency on the grounds that it exceeded its discretion (e.g. by making rules that require unconstitutional things) or that the enabling executive order is itself unconstitutional -- but these kinds of federal cases have a pretty high bar for what's called "standing" (the legal grounds to bring a particular lawsuit): you pretty much have to suffer concrete harm or be in obvious and imminent danger of suffering it to a grievous degree. (This is one reason you hear about "test cases" -- often somebody will agree to be the goat who is denied something, fined, or even arrested and convicted of a crime, so that standing to sue to overturn the law can be established.) Other times, if a lot of potential defendants already have standing, a particularly sympathetic defendant will be selected for the actual challenge. The US federal courts are also deferential to "agency discretion" by default, as a matter of doctrine.
What happens all too often with these things is, the initial rulemaking is pretty reasonable, and the public outrage (if there was any) dissipates. Then three years (or however long) on, the next rulemaking imposes onerous restrictions and strict criteria, and people suddenly (relatively speaking) wake up and find they're now in violation of federal regulations that they were in compliance with last week. (This is one reason public-interest groups are so critical -- they have the motivation and sustained attention to comb the Federal Register for announcements about upcoming rounds of rulemaking on various topics.)
Luckily there's other cheap options in Europe like in France.
Maybe they changed it now but they were asses about it then. I thought it was a legal requirement, they basically said as much though I don't recall the exact details, it was before the pandemic.
Eventually I just moved to Scaleway in France which is much nicer and cheaper and you can even talk to their support on slack.
PS: I don't do anything nefarious on my servers but I just don't want my ID on file anywhere it's not needed.
this would make it much trickier for bad actors to get away with everything from online ai scams to swatting. i could live with that.
There are scamers who walk seniors to sign up through Coinbase, the KYC requirements, to order bitcoin.
There are so many malicious actors putting human life at risk in some scenarios it should be possible to figure out who owns what.
Now, I would start with corporate ownership and focus on anonymous entities controlling things like Delaware and Nevada corporations. But that’s me.
No one wants to send in selfies and their passport just to start a Digital Ocean droplet.
There are also non-"criminals" who are more than willing to use their actual ID for the sort of things that aren't strictly illegal but will still get your IP space on a bunch of block lists when they can make a buck doing it, so it wouldn't solve the problem even if it could actually identify all of the customers.
This seems, to me, an utterly malignant attack on anonymity, which is a protected constitutional right. It's the idea that every internet packet needs to be tied back to some verified identity. We're in frog-boiling territory with this garbage.
(The courts have "recognized relatively strong First Amendment presumptions on behalf of purveyors of anonymous speech, especially for those that are statements of opinions rather than obvious falsehoods, while recognizing that government sometimes has the right to identify such speakers when they have used their platforms to harass, engage in slander or sexual predation, make true threats, or allow foreign governments to influence U.S. elections")
There is a right to express political opinions, but anonymity is a privilege, not a right.
https://cs.stanford.edu/people/eroberts/cs181/projects/anony...
And the modern Court explicitly declared that a Constitutional right to privacy does not exist, and one cannot have anonymity without privacy, so no.
Precedent is set by the majority, not the dissent.
> but no decisions that explicitly declare a Constitutional right to anonymity.
Weird then that there are several decisions striking down laws that violate the right to anonymous speech?
> And the modern Court explicitly declared that a Constitutional right to privacy does not exist, and one cannot have anonymity without privacy
One cannot refuse to turn over one's papers and effects in the absence of probable cause without privacy either.
Consider the possibility that there could be a right to anonymous speech without a right to anonymous practice of medicine. A universal right to privacy would require both. Just because it isn't both doesn't mean it's neither.
Yes. I believe a right to privacy once existed, but it was nullified as it formed the basis of the case for Roe V. Wade. As a result even the Fourth Amendment is weakened because it must be interpreted in the light of a right to privacy no longer existing.
What I'm trying to put forth is that the assumptions you're working under are no longer valid and we've thrown the baby out with the bathwater.
It was kind of the other way around. There is clearly no explicit right to abortion in the constitution, so to find one it would have to be implicit, but the Court in Roe wanted to find one, so they made one up. The reasoning was something like, the constitution implies there is a general right to privacy and laws against abortion violate it. The people who liked the result were then stuck trying to defend its inconsistent reasoning for 50 years, because the same logic would cause all kinds of other laws to be a violation of the same right. Obvious example would be drug prohibition; government invading your privacy by trying to control what you put into your own body. Same logic as Roe.
But Roe was never actually extended to any of that stuff, so overturning it didn't re-enable drug prohibition after it was struck down, since it was (inconsistently) never struck down to begin with.
The cases having to do with anonymous speech are independent and use entirely different logic. The general idea is that people are deterred from speaking (chilling effects) if people can associate what they have to say with a physical person who can then be harassed for expressing an unpopular opinion. It doesn't have any of the same problems because there is no First Amendment right to morphine, which they could ban outright under the same justification as they ban heroin, so having to show your ID to get morphine isn't deterring you from exercising your right to free speech.
The closest the government comes to prohibiting an opinion is copyright, but even then you can restate the opinion in your own words, and when an exact quote is necessary to make your point it's fair use specifically because it would otherwise violate free speech.
There's been multiple attempts to do this. Via KOSA and a few others lately in our Congress. PR friendly candidates like Duckworth have been trying to walk this through the system.
Only foriegners.
> It's an attempt to stymie sanctioned or malicious actors, from training AI and especially from hopping between services or using aliases to continue training on their model.
Unlikely, since it exempts non-foriegn malicious actors
EDIT: I know it's about IaSS.
Computing is a global commodity. There are providers in other countries. They would just use one of those.
>>"require U.S. IaaS providers to verify the identity of foreign users of U.S. IaaS products, ... which calls for the Department to require U.S. IaaS providers to ensure that their foreign resellers verify the identity of foreign users. E.O. 14110 also provides the Department with authority to require U.S. IaaS providers submit a report to the Department whenever a foreign person transacts with them to train a large AI model with potential capabilities that could be used in malicious cyber-enabled activity."
We damn well SHOULD be identifying foreign users of our services, particularly those which have high-powered potential to cause harm.
This knee-jerk [govt identifying anybody is bad] response prevalent here deeply undermines the cause of actually maintaining privacy. There are actually very bad actors out there, and if we fail to identify and contain them, things will be far worse. The reality is that some measures must be taken — let's focus on containing the real threats, not cry foul at every shadow of a hint that we might approach a slippery slope.
This. Also, it won't stop malicious actors. Setting up a LLC to mask your true identity is cheap and easy. Not to mention that providing a fake identity or pretending your are not a "foreign person" is also cheap and easy.
This site is so damn funny. I reply to a burner account in a day old thread, and then my comment is downmodded less than 60 seconds later. Points to some shockingly pathetic behavior, dang maybe you could check the IP on that alt account, might be interesting.
Idk, I guess if I take the less charitable read of your comment, ... if you're sitting here blaming your circumstances for not knowing anything other than how to spin up overpriced Amazon serives idk what to tell you.
KYC adds a huge burden to anyone trying to offer a service. Implementing KYC imposes significant burdens on service providers due to the complexity of identifying users across different countries and understanding varied regional regulations. You end up outsourcing your KYC to another company. But most KYC vendors don't support all the countries you want to support, so you either end up limiting your service to the service area of your KYC vendor. Or you end up integrating multiple vendors together, which is challenging since vendors generally prefer exclusivity.
If you didn't have an engineering team working on KYC before, you will now. You will likely need to add to or expand your compliance team. Your company will shift either slightly or significantly from being an engineering or product driven company to being a compliance driven company.
KYC raises barriers and entrenches incumbents. Look at financial institutions and porn.
KYC is generally not evidence based policy either [1, 2]. Bad actors get around your KYC requirements, and your KYC system ends up being a hurdle for innocent users. A lot of KYC systems rely on data aggregators (aka the people who buy your personal data), and if you aren't "in the system" either because you are young, poor, or privacy conscious, you are faced with suspicion.
My experience is that anti-fraud systems tend to weed out bad actors better than KYC systems that are mandated in a governmental top down manner.
1) https://www.economist.com/finance-and-economics/2021/04/12/t...
2) https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
Then again I worked on blockchain tech around half a decade ago, so I might be knowledge biased here?
Once you're familiar with it, your brain/eyes key onto "KYC" much more strongly than "know your customer". I might have missed the latter, but "KYC" in the title grabbed my attention instantly and reading the title made my heart jump a bit, because generally KYC means a pain in my ass, and even moreso for friends here on visa.
I have a Canadian friend visiting and staying with my girlfriend and I for a month or so. KYC causes actual headaches for her, to the point that she just decides not to get cellular service at all while she visits unless I get a pre-paid SIM under my name and hand it to her. When she pays for things like restaurants, I can't just Venmo/Paypal/Zelle/ApplePay her back on the spot, I have to withdraw cash at some point and coordinate giving it to her.
The general concept of "KYC" makes sense for some situations, but actual implementations really fucking suck for a lot of people. It's very scary to me to see it be required for more and more categories of services because of the way it's currently implemented.
But remembering the meaning of an acronym while scanning front page post titles without much context? No. My brain is pretty ruthless at evicting TLAs that are reasonably distant from my core areas of interest.
KYC is essentially about knowing who you are doing business with.
For individuals that's relatively easy, just the name and identification is required but typically there is the need to verify that the identification actually belongs to the person signing up. In banking that's why you typically have some video call with a verification provider.
For businesses it gets a lot more complex because it's not enough to know what business your client is, you also have to look through its corporate structure to figure out who the "ultimate beneficial owner" is. Essentially, who is actually controlling the business.
Now it got a lot easier recently as many countries now require businesses to file who their ultimate beneficial owners (UBOs) are.
The painful part is that it introduces friction in customer journeys as now you have to request the documentation.
In the financial industry you also have to run checks on those UBO's so that they are not known terrorists or sanctioned individuals but it seems this regulation is just that IaaS providers need to know who actually operates a server. Presumably for forensic analysis after a cyber attack.
The proposal seems to use the term Customer Identification Program (CIP) instead, mentioning KYC (spelled out) only once, in the introduction:
> Section 1 of E.O. 13984 requires the Secretary to propose, for notice and comment, regulations that mandate that U.S. IaaS providers verify the identity of foreign persons that sign up for or maintain accounts that access or utilize U.S. IaaS providers' IaaS products or services (Accounts or Account)—that is, a know-your-customer program or Customer Identification Program (CIP).
would have been a better title. The missing information is more easily guessed from skimming the article than the mystery acronym.
Isn't effectively the majority of what the Snowden leaks covered essentially violating the 4th amendment?
Comparing what one individual did in the past to a formal government policy doxxing away peoples' 4th amendment rights is a strawman argument.
This KYC requirement seems to me, at a glance, as being a small erosion of our digital privacy.
I would say "unconstitutional" (it was on its face legal), but yup.
> and was being done in secret
Do open secrets count? We all knew they were spying.
> and once exposed they had to stop
BAHAHAHAHAHAHAHAHAHAHA
This is not obvious to me as my experience has been largely negative post-KYC/9-11 vs pre-KYC/9-11. I am a legal law abiding citizen [and voter!] and it's just added extra hassle on various occasions and then the background anxiety of knowing an institution with crappy security track records hold a photocopy of my ID. And yet all the things KYC was supposed to prevent still continue unabated: money laundering, terrorist financing, identity theft, and financial fraud.
I'm curious to hear why you think it's obviously good and if you were using these services before KYC.
The problem is that there are no checks and balances preventing banks from freezing assets because they want to or the government told them to.
Banking needs to be a right, and unless someone is convicted of a crime involving the bank account's assets, banks and governments should not be able to freeze them. There can be exceptions for fraud like FTX where there will be a significant financial harm to other individuals if the assets aren't frozen, but what we have today is unchecked government financial terrorism against individuals they do not like, and now they want to extend that terrorism to speech.
KYC helped them by deny-listing abusive clients between branches, or by allowing the bank to develop heuristics for things like allowing customers to bypass cheque clearing times.
From an end-user perspective, I've had no hangups personally but I do share your grievances about yet-another-shoddy institution holding a photocopy of my ID. My bank truncates passwords when setting them, and when logging in, without telling the user. It boggles the mind.
We have exactly 4 days to leave comments to the Federal Government of the United States of America contesting the requirement of KYC by internet service providers.
This law is not conducive to a free internet/society.
I think the biggest argument against it is that this removes anonymity on the internet, at least from governments, and that would remove people's ability to freely voice their opinions without fears of repercussions (will the first amendment ever be modified? Will people who discuss what it's like to be an illegal immigrant/drug user/etc. be persecuted)? Also, it raises the question of what happens to users of VPN's, public internet, etc.
It seems to de-anonymize a set of IaaS customers, sure; but that's not nearly the same thing as removing anonymity completely. I've only just scanned this but it seems at first glance to mean that a foreign company can't anonymously spin up an AWS instance, that's all. Am I reading this incorrectly?
There are so many things that can fall under the IaaS bracket. Think anything 'cloud'. Maybe that's not how they'll apply it, but legally they are free to do so. It's a huge reach.
Basically, it forces providers of a very wide variety of tech related services to collect identifying info on anyone who uses their services, and then store that info to either eventually be exposed in a breach, subpoenaed by the government, or sold to the highest bidder (might as well monetize it if you're forced to collect it )
This is about IaaS not “internet services”. It doesn’t remove anonymity from internet users, just foreign customers renting cloud servers and other infrastructure.
> This proposed definition adopts the E.O. 13984 definition for “Infrastructure as a Service product”, which is any product or service offered to a consumer, including complimentary or “trial” offerings, that provides processing, storage, networks, or other fundamental computing resources, and with which the consumer is able to deploy and run software that is not predefined, including operating systems and applications.
How would an ISP not be misconstrued as a "managed network"? Deploy/run software could just as easily be running some protocol over the network connection?
Sure, there are very few international ISPs which would be affected by this as physical infrastructure must be local to the user, but I wonder if this would be true always (e.g.: Starlink)
This would apply to all hosting providers, which is bad enough.
- TCP is a spec delivered by a software implementation program. Maybe you disagree that TCP is being "deployed" as opposed to "used"?
- What about peer-to-peer hosted webpages? Certainly this is deployed software served over the internet connection?
The devil is in the details... details which are not specified in the order. It wouldn't be hard to imagine a lawyer arguing the finer details of "deployed" and "software" and falling on a definition which results in a less "open" Internet.
Also, I think of the meaning of "that is not predefined" is not at all clear. Predefined at what point in time?
IANAL.
Today, anonymity and pseudonymity exist and allow people to speak freely without risk of backlash for having a different opinion as often times the right opinion may differ with that of social consensus.
If KYC is introduced, the ability to maintain freedom of speech, online, will likely diminish.
This is of negative consequence to the people of the world.
Further, with internet 'forever data', LLM NLP and so forth, character profiles are too easy to develop for people which can cause further harm as we begin segregating based on said profiles.
I believe this KYC requirement can even extend to blockchain node operators and so forth as well.
These are just a few reasons but there are many more.
But remember that you can have a perfectly effective web host that simply accepts HTML uploads.
Certainly a tremendous loss of convenience and features but speech itself could still be available under this regime…
See https://www.federalregister.gov/d/2024-01580/p-46 for their definition.
Misrepresenting what this is about is not helpful.
This discriminates people from other countries from having tech resources, possibly increasing poverty by limiting opportunities, at the same time it exposes people to have their data leaked. I don't see how this is a good idea.
The trail of knowing ones customers always leads to payments and finance.
If we are accepting payment for our services with standard bank card transactions or wire transfers, etc., then the knowing of the customer can be centralized at the banks.
Unless we create global governing initiatives similar to FATF for IaaS products, American IaaS offering will become less competitive.
The problem is that KYC, being a cost centre with no upside other than "it's imposed on us by law", immediately turns into a box-checking exercise.
The industry will barf up some terrible "compliance in a box" solution, everyone will use it, it will eventually get databreached, and the people who brought us Bulletproof Hosting back in the Viagra Spam era will come back with Bulletproof Rack Full Of Quadros.
"Liveness checks" where we have to turn on our webcam and let some stranger make a full biometric model of our head to use basic internet infrastructure is the dystopia we deserve, and it's the one we're gonna get.
I hope the "AI" was worth it. Let's see if you can fix this problem you created.
This has nothing to do with AI, but an out-of-control executive branch and intelligence agencies. AI is just another tool that will make it cheaper.
> To address these threats, the President issued E.O. 13984, “Taking Additional Steps To Address the National Emergency With Respect to Significant Malicious Cyber-Enabled Activities,” which provides the Department with authority to require U.S. IaaS providers to verify the identity of foreign users of U.S. IaaS products, to issue standards and procedures that the Department may use to make a finding to exempt IaaS providers from such a requirement, to impose recordkeeping obligations with respect to foreign users of U.S. IaaS products, and to limit certain foreign actors' access to U.S. IaaS products in appropriate circumstances. The President subsequently issued E.O. 14110, “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence,” which calls for the Department to require U.S. IaaS providers to ensure that their foreign resellers verify the identity of foreign users. E.O. 14110 also provides the Department with authority to require U.S. IaaS providers submit a report to the Department whenever a foreign person transacts with them to train a large AI model with potential capabilities that could be used in malicious cyber-enabled activity.
I don't think this would cover VPNs or internet access, mainly just people spending lots of $$ on compute. Is that correct? If so it seems reasonable. If a non US group is spending lots of money using US technology to develop an AI model I do think that falls under foreign trade and should be documented.
As a matter of simple efficiency, what I suggest to you all is that you imagine this was being rolled out by the British government.
Because then you'd all be certain what it meant and what was necessary.
On the other hand it seems like half the business of The City is providing cover for dodgy foreign companies, which would be perfect for people trying to get around these laws.
That's the logical end-game of all this in case you don't have the foresight to see where this road leads.
I don't agree with this on principle, but even just from a practical perspective it seems like they are leaving the door completely open by doing that. What's even the point?
I can't think of any US service I am using that doesn't already require KYC? None of the large providers will let you get far without a credit card, as far as I remember?
Since the discussion here will consider itself mostly with upright revolutionaries being disenfranchised by such insult to their liberties, it is worth noting that when the revolutionaries are foreigners, the US often doesn't have the same incentive to disenfranchise them as it might have for domestic troublemakers.
In fact the US has quite a track record of granting rights to foreigners in excess of what they find at home, and even when it concerns allies: request by European courts and law enforcement are regularly rejected based on US norms when, for example, someone hosts their hat speech blog with an US-only provider.
There are several credit card vendors that do not require KYC that are easily available. I don't know of any banks that don't require KYC that you would use to pay those CC bills, but I wouldn't be surprised if they exist.
Makes you wonder how they are going to first determine which are foriegn...
Just don't use American IaaS in the first place. It's not like computers are available only in the US.
The identity check is typically done by a trusted 3rd party that can delete the data right after the identity check (and can be required to do so).
So you basically end up guaranteeing that the name, address and D.O.B that you provided to the IaaS provider is actually correct, nothing more and nothing less.
I trust a "trusted third party" far, far less. Inevitably it's a data hoarder like our credit-bureau overlords, which has commercial motivations to ask for more data than needed, and hold it longer than necessary, and will likely suffer only a slap on the wrist when they inevitably data-breach.
We really needed a coherent plan for national and digital ID 20 years ago, but as they say, the second best time would be now.
This is generally not difficult for anyone concerned, unless they happen to share a name with somebody on that list.
Obviously, modern data processing creates the rightful fear of surveillance. What we lack is a culture of privacy. In other countries if the state or anyone else wants to access the land registry or any other: good luck without a lawful reason.
The acronym "KYC" doesn't appear in the linked article. What is this even about?
A fast-moving emergency that can't be fixed by normal constitutional lawmaking processes, and must resort, exceptionally, to executive-branch emergency decrees—for expedience. Nevermind the executive order it's drawing authority from was written three years ago. It was a fast-moving emergency then, too, I suppose.
https://www.federalregister.gov/documents/2021/01/25/2021-01... ("Taking Additional Steps To Address the National Emergency [sic] With Respect to Significant Malicious Cyber-Enabled Activities" (2021))
"What important truth do very few people agree with you on?": I believe that nobody is running the show. The systems we have created are more complex than we understand. I think a few people individually understand a few aspects of the different systems (we are not at the complete mercy to these systems).
I also believe that we have a psycological need to know our social heirachies therefore we create stories about who we think is in control. That need creates conspiracy theories! That need creates narratives that certain people are running the world (but when you look closy at those people they are not running things - they don't understand how everything works even though they put much effort into trying to).
Or were atoms the foundation? Or thinking? Or maths? Or law? Or take away black holes and nothing gets done?
Ranking interdependent systems is nonsense. Reductionism and false arguments don't help much either.
Or maybe you have a manipulative world view? What is more important - money or power? If you have power do you need money? Is power equivalent to money?
"Money" is a means of exchange, and in some contexts it is a status signal.
Money is a measure, not an ends in itself. People want the money to do something with: the something is faaaar more important than money. Find me a person with money, and I will easily find ten things they would prefer.
Anecdotally:
My friends don't value money above other things. Other friends could easily take nearly all my money if they chose to (I put myself into very submissive situations). I don't work because I don't need more money.
Perhaps I live in a different world than you.
The people I know all have complex desires, and few of my friends are concentrating on making money (and the smartest friends I know don't make money their central goal). I do have a couple of friends who try to make money and they seem to do it quite well without too much difficulty.
Have you tried to offer money to people? If it is so critical then people would take it. My experience is that a few do but many don't. I've offered large amounts to acquaintances that haven't taken it (perhaps with or without hooks).
(Slight edits for clarity).
Your logic appears poor to me: perhaps that is why you employ logicians - money is your solution? Money doesn't write software, people do. People's motivations are crazy complex: which causes good or bad software to be created.
> Nobody
Somebody: My guest today was working for $0 on two systems (one maintenance, one he is developing). Both were difficult and annoying computer systems with a complex userbase. He didn't seem to really want to do the job: yet he was doing it for free (well, actually it was costing him)! Why does he need money if he gets his needs met by friends and acquantances. His only payment appears to be friendship and good company and his internal satisfaction (for varied reasons). I don't understand his motivations but yesterday he had said that offering him money would strongly demotivate him. Illogical?
Perhaps your philosophical world view has little overlap with mine. I have retired early so that is a signal that my world view is different from most people's. I haven't recently needed to buy development time so maybe my opinions are stale.
I'm inclined to agree, though I do think there's a disproportionate amount of influence in some groups. I also worry that the true danger of an artificial super-intelligence is not in a SkyNet-like scenario, but a more subtle and slower influence over global societies via trade and economics. It already more or less runs the world in abstract, so a thing that can understand all the complexities and manipulate them with capital has the potential to be very dangerous.
If you do not want that, the country has to work on a functional Parlament and switch away from a presidential system.
If someone is using infomercial level logic/details/understanding to get you riled up, step one is to step back and get a better understanding, not to grab a pitchfork and get bitter.
An post highlighting that the government is soliciting comments shows we don't actually have a king that can do whatever they want. You personally can comment on this proposal, and if you have a compelling argument, can stop it or in the future force your comment to be addressed. Remember the standard is that the Federal government's actions can not be arbitrary and capricious.
> Remember the standard is that the Federal government's actions can not be arbitrary and capricious.
That assumes that everything is regulated by law (unrealistic) and that you have a working parlament (currently not the case in the US). Imagine Russia is invading Canada. Would you prefer a US president with the power of declaring war or the parlament starting to debate over it. A war has 100x more consequence than this KYC thingy here.
The Great Depression, the savings and loan crisis, and the GFC all happened after the establishment of the Federal Reserve. Sure, I guess you could claim that all of those would have been worse without the Fed, but reasonable minds can differ on that without being an "ancap".
The only thing worse than a bunch private bankers controlling monetary policy, is a central bank controlling monetary policy.
Yes, an argument can be made. And such an argument can and should be quickly discarded with a glance at the last thousand years or so of human history. We tried it. Rolling the dice that the next king or tsar or emperor to own the people will at least treat them kindly. And we decided that being owned by a government in which we have no franchise is a bad idea. A very bad idea.
Check this out: https://en.wikipedia.org/wiki/List_of_national_emergencies_i...
In the US we have 42 (!) ongoing national emergencies. The oldest dating back to 1979. I think most of US-based HN readers never lived in non-emergency US.
Maybe POTUS should declare an emergency to reduce the number of emergencies?
Of course, it didn't last long - as soon as the focus moved on, emergencies started popping back up.
It is not easy to run your life, company or government org without doing once in a while something wrong. It is how you behave afterwards and overall which matters.
If "emergency" action is needed because Congress is too slow, then let's make sure they are working through the process to create real law. Or if they aren't, I guess it wasn't an emergency, and there's no reason for administrative law to "fill in" using a non-democratic process.
> “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things ...
Note it says "the people" and not "citizens of the United States". Everyone has this protection within U.S. borders, SCOTUS has ruled to this effect.
So the government forcing yet more private companies to do their unconstitutional bidding seems like something that should b opposed. I believe banks being required to collect KYC came about through The Patriot Act. If this trend continues, you'll need to verify your identity to use any service.
Banks collecting KYC actually started with the Banking Secrecy Act of 1970. This was tried in the Supreme Court case California Bankers Association v Schultz (1974). It holds that recordkeeping requirements do not constitute a privacy violation under the 4th amendment absent reporting requirements. Since this new rule (2024) applies only to foreign entities and OFAC controls provide penalties for domestic companies, there’s no fifth amendment issue either (which is a shame imo, the 5th amendment argument in Bankers v Schultz seems incredibly shaky).
There’s no reporting requirements or new crime being created here; the intention is to “”aid”” IaaS providers in complying with OFAC requirements, and, when a warrant is issued, the actual identities of the customers to be known.
Once we started to send "National Security Letters" to public libraries after PATRIOT to find out what people were reading, this future became an inevitability.
If it imposed KYC on intra-state customers, or non-commercial services, then it would be a different story.
I'm not writing this to argue against your position, but to help people craft effective comments to submit in response to the proposed regulation. Federal agencies are not responsive to comments about people disliking a proposed rule, but are very responsive to concrete examples of why it might be legally problematic.
> “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things ...
I propose that any new regulation gets financed by the the regulators . And retro actively get all regulations to have their cost covered by the government.
Who pays the auditors. Who pays Accountants, who paid for data protections schemes, who pays for random sanctions making countless companies suddenly lose large part of their business . Regulations are great, it should be at the government charge though, so that we can continue to do business, prevent market entry costs which promotes monopolies/oligopolies, encourage compliance.
That said the system is only as strong as the weakest link in the chain, and while getting a credit card/cell phone number in the US requires a certain standard of identity verification, the same might not be true for other countries (or in cases of deliberate fraud). I think that is what the legislation seems to be targeting.
That doesn't mean it is good legislation or won't have unforeseen side effects.