Hacker News Reader

Comment by rwallace | Hacker News Reader

Yep. It's burdening 99% of legitimate users with a very minor inconvenience, to stop the 1% of bad actors who would otherwise end up doing a lot of really bad things that would harm the 99% in ways that go far outside the scope we think of as covered by the financial system.

So yes, I understand where you're coming from, but my libertarian instincts to reflexively think of KYC/AML as excessive and annoying regulation and untrammeled exchange as a good thing, turn out on closer examination to be simply wrong.

View on HN

I'm not sure I would categorize it as "minor inconvenience". In terms of financial numbers, it's estimated to cost 180B$ [1]. You also have to consider all the opportunity costs of what we could achieve with a faster and smoother financial system. And you have to consider financial inclusion and all that, there are lots of really interesting financial instruments that I can't access because there's some retail that doesn't understand exactly how it works and because we lower regulations to lowest common denominator, let's just ban it. We are also cutoff from these exchanges like Binance which have much more liquidity, more interesting products, etc.

And I'm not sure that it's all that effective, especially after seeing HSBC launder money for cartels and get away with it [2]. Oh and none of these regulations obviously stopped 2008 or any of the previous crises.

To me a lot of these regulations seem like the TSA security theatre, seems useful, but at this point, pretty outdated and inefficient.

1: https://www.cpomagazine.com/cyber-security/global-cost-of-fi...

2: https://www.investopedia.com/stock-analysis/2013/investing-n...

Agreed that this isn't just a "minor inconvenience" and as a resident alien in another country for a while (the UK), I found KYC regulations to be really quite obnoxious — and I was a pretty good position to handle them, at that.

The question of whether it's worth it is a real one, and more honestly answered (whether positive or negative) if we admit these substantial costs.

Okay, fair enough, maybe 'very minor inconvenience' is understating it. And granted that the safeguards are not perfect, and some financial crime does get through. I still think the current state of affairs is a big improvement on what we would have if we just threw out the regulations.

Reply on news.ycombinator.com