We need to take a step back and understand that there is no such thing as compliance oriented privacy, that is an orwellian term. It implies that governments have the white and black and associative lists of the addresses/people/metadata--
and by the way so does Circle and Tether, but they only flex their powers in the most high profile situations.....for now....but you are *technically* at their mercy.
Secondly, we need to realize there is no such thing as aml-kyc-ctf arbitrage. If you call me a schizophrenic you are making several claims
1) You're claiming OECD Regs and China and UN and member countries don't agree to standards for traditional finance globally that america wrote
2) You're claiming that random people can get KYC free brokers for finance and banking in developing nations--which hasn't been true since the 2008 Panama Paper accords at the UN
3) You're claiming that the EU, China, UN will leave DeFi alone in other countries outside of america and allow it to do absolutely nothing to address compliance, except some honor system like Circle has
4) You're claiming that the EU and UN and China won't enforce any state sanctioned white lists and black lists where the policy design and architecture largely come from american agencies
The issue here isn't that Rail Gun was made or that devs tried or that it is wrong to make the tech, the issue is that if you try to do industry led free market self regulatory systems over something as severe as amlkyc-ctf, they will not allow it, they will micromanage it until not only RailGun, but also Uniswap itself is left shutting dozens of countries out of DeFi entirely just like the Terms of Services do on all centralized crypto exchanges globally. These centralized exchanges ban 100s of millions of innocent people preemptively.
things like Privacy Pools & RailGun, Nocturnal, and compliance oriented privacy (talk about jumboshrimp) are neither problem nor the solution, they're merely illustrate that there is no limiting principle with the UN and OECD when it comes to amlkyc ctf
Europe, UN, OECD are the problem, they go above and beyond the amlctf proscribed in FinCen and american law, and they have none of the 28 amendments protecting them we do. They'll let you gamble all you want--as long as you do american amlctf.
These protocols represent precrime and thought crime where developers try to comply with unconstitutional demands to make tracing and tracking systems, thinking if they give the international regulatory bodies and inch, they won't take a mile.
They are going to take two miles.
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