path: root/e2/9823e42bbcc3219364893067a74c0b9c31d2a0

Return-Path: <ahmedzsales18@gmail.com>
Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org
	[172.17.192.35])
	by mail.linuxfoundation.org (Postfix) with ESMTPS id BFE1BE00
	for <bitcoin-dev@lists.linuxfoundation.org>;
	Thu, 27 Aug 2015 09:04:34 +0000 (UTC)
X-Greylist: whitelisted by SQLgrey-1.7.6
Received: from mail-vk0-f42.google.com (mail-vk0-f42.google.com
	[209.85.213.42])
	by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 0BBBF63
	for <bitcoin-dev@lists.linuxfoundation.org>;
	Thu, 27 Aug 2015 09:04:34 +0000 (UTC)
Received: by vkd66 with SMTP id 66so6080682vkd.0
	for <bitcoin-dev@lists.linuxfoundation.org>;
	Thu, 27 Aug 2015 02:04:33 -0700 (PDT)
DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20120113;
	h=mime-version:in-reply-to:references:date:message-id:subject:from:to
	:content-type; bh=xiGY8CxHjOq2O9tdGSd6r1ogfoCR+/Qt7TyC6/w4O5E=;
	b=G0vL4iHD/vuhyfVKzQpZ6fd4EuvihwLhgMurES78Q1PsX+/EgPuLNWTkA2VumOMnBu
	ReJ78CJGOnYtp3gsPuDwiDmckPdR1kWiCjDM7mEW6utYO0yCJq0SpAQe2ID/RLHaJ4Wm
	tH7WEetnZ9mMCKuO7BfsoftXQzgjtv31XzoAABtcidbqUfUBM5XRq/wupuT1BPBBAC0C
	0S1L5eQJMVHLmC6qwrrS+eIFtqA9hFQQq+G564sBdjHMtOc3pydEDs1k+MIE+pke8lap
	IoVXmihmIdMlMKv5sbmc8isd0vj6yZZ38TtUkQ2UWlwkj7AO2JXuOx14SwD0T5as8J5P
	kfyw==
MIME-Version: 1.0
X-Received: by 10.52.163.50 with SMTP id yf18mr3309251vdb.93.1440666273167;
	Thu, 27 Aug 2015 02:04:33 -0700 (PDT)
Received: by 10.31.109.134 with HTTP; Thu, 27 Aug 2015 02:04:33 -0700 (PDT)
In-Reply-To: <CALoZ_LG7POrwNqtG9prvG_1T3+OcWNo9cKbiwHDu9xP85zqOEA@mail.gmail.com>
References: <CALoZ_LG7POrwNqtG9prvG_1T3+OcWNo9cKbiwHDu9xP85zqOEA@mail.gmail.com>
Date: Thu, 27 Aug 2015 10:04:33 +0100
Message-ID: <CADr=VrT9BBR_CGhr0ODvggtJx7tXW=uMky+S9UXgrXS3CmHHyw@mail.gmail.com>
From: Ahmed Zsales <ahmedzsales18@gmail.com>
To: prabhat <prabhatkr@gmail.com>, 
	Bitcoin Dev <bitcoin-dev@lists.linuxfoundation.org>
Content-Type: multipart/alternative; boundary=001a11c2ce3873bf22051e4741c9
X-Spam-Status: No, score=-2.4 required=5.0 tests=BAYES_00,DKIM_SIGNED,
	DKIM_VALID,DKIM_VALID_AU,FREEMAIL_ENVFROM_END_DIGIT,FREEMAIL_FROM,
	HTML_MESSAGE,RCVD_IN_DNSWL_LOW autolearn=ham version=3.3.1
X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on
	smtp1.linux-foundation.org
Subject: Re: [bitcoin-dev] BIPS proposal for implementing AML-KYC in bitcoin
X-BeenThere: bitcoin-dev@lists.linuxfoundation.org
X-Mailman-Version: 2.1.12
Precedence: list
List-Id: Bitcoin Development Discussion <bitcoin-dev.lists.linuxfoundation.org>
List-Unsubscribe: <https://lists.linuxfoundation.org/mailman/options/bitcoin-dev>,
	<mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=unsubscribe>
List-Archive: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/>
List-Post: <mailto:bitcoin-dev@lists.linuxfoundation.org>
List-Help: <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=help>
List-Subscribe: <https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev>,
	<mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=subscribe>
X-List-Received-Date: Thu, 27 Aug 2015 09:04:34 -0000

--001a11c2ce3873bf22051e4741c9
Content-Type: text/plain; charset=UTF-8

I would prefer not to download an attachment.

Generally and without having the benefit of reading your document, AML and
or KYC requirements are treated on a jurisdiction by jurisdiction basis.
You would probably need to factor obtaining a universal agreement between
all of the governments and regional enforcement bodies of the world on the
nature and scope of an acceptable set of policies before attempting to
attach rules to the protocol. Clearly, when one country unilaterally places
politicians of another country on banned lists and vice versa, for example,
would create some problems with implementation and automating checks
against banned lists produced by each country.

While you could apply a 'home rule' approach, you would be pushing
regulatory controls down to individuals transacting between each other
without having to go through any regulated intermediaries. This means you
have no way to enforce KYC or verify that the details are correct unless
you create a system of third party checkers in each country who would
enable transactions to proceed. To overcome all of this you would probably
need some identity verification system in place first and to add extra fees
into the network to pay for the maintenance of the system.

As has already been pointed out, the above would lead to individual coins
being tainted with previous ownership details creating the possibility for
blacklists rendering some coins worthless and creating the possibility of
these coins being passed on to unsuspecting users. All this goes against
the spirit of monetary systems, so you are back to regulating end points as
and when users come into contact with regulated entities.

Lastly, it might be worth knowing that criminal liability can be placed on
individuals responsible for implementing AML and KYC procedures and
policies that do not work or allow criminals to circumvent the systems of
controls.

On Thu, Aug 27, 2015 at 9:10 AM, prabhat via bitcoin-dev <
bitcoin-dev@lists.linuxfoundation.org> wrote:

> Hi,
>
> I am proposing to create a AML-KYC module to control the network and also
> qualify use cases in OFAC compliant way.
> Here is the attached doc.
>
> Please provide your feedback and suggestions.
>
> Best,
> Prabhat Kumar Singh
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>

--001a11c2ce3873bf22051e4741c9
Content-Type: text/html; charset=UTF-8
Content-Transfer-Encoding: quoted-printable

<div dir=3D"ltr"><div><br></div>I would prefer not to download an attachmen=
t.<div><br></div><div>Generally and without having the benefit of reading y=
our document, AML and or KYC requirements are treated on a jurisdiction by =
jurisdiction basis. You would probably need to factor obtaining a universal=
 agreement between all of the governments and regional enforcement bodies o=
f the world on the nature and scope of an acceptable set of policies before=
 attempting to attach rules to the protocol. Clearly, when one country unil=
aterally places politicians of another country on banned lists and vice ver=
sa, for example, would create some problems with implementation and automat=
ing checks against banned lists produced by each country.=C2=A0</div><div><=
br></div><div>While you could apply a &#39;home rule&#39; approach, you wou=
ld be pushing regulatory controls down to individuals transacting between e=
ach other without having to go through any regulated intermediaries. This m=
eans you have no way to enforce KYC or verify that the details are correct =
unless you create a system of third party checkers in each country who woul=
d enable transactions to proceed. To overcome all of this you would probabl=
y need some identity verification system in place first and to add extra fe=
es into the network to pay for the maintenance of the system.=C2=A0</div><d=
iv><br></div><div>As has already been pointed out, the above would lead to =
individual coins being tainted with previous ownership details creating the=
 possibility for blacklists rendering some coins worthless and creating the=
 possibility of these coins being passed on to unsuspecting users. All this=
 goes against the spirit of monetary systems, so you are back to regulating=
 end points as and when users come into contact with regulated entities.=C2=
=A0</div><div><br></div><div>Lastly, it might be worth knowing that crimina=
l liability can be placed on individuals responsible for implementing AML a=
nd KYC procedures and policies that do not work or allow criminals to circu=
mvent the systems of controls.=C2=A0</div><div class=3D"gmail_extra"><br><d=
iv class=3D"gmail_quote">On Thu, Aug 27, 2015 at 9:10 AM, prabhat via bitco=
in-dev <span dir=3D"ltr">&lt;<a href=3D"mailto:bitcoin-dev@lists.linuxfound=
ation.org" target=3D"_blank">bitcoin-dev@lists.linuxfoundation.org</a>&gt;<=
/span> wrote:<br><blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8=
ex;border-left:1px #ccc solid;padding-left:1ex"><div dir=3D"ltr"><div><div>=
<span style=3D"font-size:12.8000001907349px">Hi,</span><br style=3D"font-si=
ze:12.8000001907349px"><br style=3D"font-size:12.8000001907349px"><div styl=
e=3D"font-size:12.8000001907349px">I am proposing to create a AML-KYC modul=
e to control the network and also qualify use cases in OFAC compliant way.<=
/div><div style=3D"font-size:12.8000001907349px">Here is the attached doc.<=
/div><div class=3D"gmail_extra" style=3D"font-size:12.8000001907349px"><br>=
</div><div class=3D"gmail_extra" style=3D"font-size:12.8000001907349px">Ple=
ase provide your feedback and suggestions.</div><div class=3D"gmail_extra" =
style=3D"font-size:12.8000001907349px"><br></div><div class=3D"gmail_extra"=
 style=3D"font-size:12.8000001907349px">Best,<br clear=3D"all"><div>Prabhat=
 Kumar Singh</div></div></div></div>
</div>
<br>_______________________________________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.=
linuxfoundation.org</a><br>
<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" =
rel=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.org/mail=
man/listinfo/bitcoin-dev</a><br>
<br></blockquote></div><br></div></div>

--001a11c2ce3873bf22051e4741c9--