The article of the week is the shortest ever published, so it’s perfect for a quick read - Digital Shadows: How the Internet Empowers Anonymity and Challenges Governments.
We talk about Pseudonymity, Anonymity, Bitcoin and Monero, and their impact on society : https://disruptive-horizons.com/p/digital-shadows
Here is an article that I wrote to try to predict how Nation-States will react to the disruption brought by the Internet and globalization.
I try to think from first principles, in particular to predict how they will try to defend themselves against this disruption, and what other models of governance could emerge :
https://disruptive-horizons.com/p/10-principles-of-history-for-predicting
How cryptocurrencies are disrupting Nation-States, part 2 : Why wasn't Satoshi Nakamoto prosecuted? And DAOs and other pleasantries... https://disruptive-horizons.com/p/cryptocurrencies-are-disrupting-nation-states-2
🔔 Ever wondered why your bank asks so many questions about your transactions, like where the funds came from, where they were going, the reason for the transfer, your last tax return, and the size of your socks?? It's all thanks to KYC and AML. But are they really protecting us or causing more harm? Let's dive into this. 🧵
🔍 KYC (Know Your Customer) and AML (Anti-Money Laundering) were born to protect the realm of financial transactions. They aim to prevent fraud, money laundering, and the financing of terrorism. Amazing, right? But there's more to the story.
📚 These policies have evolved over the years, with banks and financial institutions required to put in place strict policies and procedures. But are they really effective? Studies show they recover only 0.05% of criminal funds (!)
🔒 At the same time, as these two regulations allow banks to close accounts on the slightest suspicion, often without giving any reason, they open the door to discrimination. See, for example, this article from the New-York Times in April 2023, "Banks Are Closing Customer Accounts, With Little Explanation" 😞
🚨 Take the case of Nigel Farage, a British broadcaster and former politician. His bank decided to close all his accounts without warning or explanation. He tried to open an account at 10 different banks, all of which refused him. 😠
💸 Moreover, the cost of compliance with AML and KYC regulations is astronomical. In 2009, the estimated annual global cost was of the order of $304 billion, or 0.38% of global GDP, while the authorities manage to seize around $3 billion a year in criminal funds worldwide (!) These costs are passed on to customers and taxpayers.
⚖️ KYC and AML procedures also contradict the concept of presumption of innocence, a fundamental principle of law. They consider you guilty until proven innocent. Is this the kind of world we want to live in? 🤔
🗣️ In short, KYC and AML are regulations that create immense friction in society, which diminishes its freedoms and wealth, while corrupting one of the fundamental principles of democracies. The time has come to demand transparency and fairness in our financial systems. Read more about this issue here: https://disruptive-horizons.com/p/kyc-aml-destroying-world
#KYC #AML
