Comment by whatisweb3 | Hacker News Reader

Comment by whatisweb3 | Hacker News Reader

This is pretty brutal regulation as it basically forces users to pay twice - once to transfer to a non custodial wallet they own and have KYC’d, and then again on-chain to transfer out to the desired beneficiary to maintain the receivers privacy. It’s the kind of cookie popup law that does nothing to stop bad actors, but does everything to make the average user experience worse.

The regulation here feels invasive and poorly constructed - no surprise it is coming from the EU which is also attempting to put surveillance mechanisms into E2EE chat apps.

EDIT: to the OP, Coinbase is not the promise of crypto. The promise of crypto is non custodial access to digital assets and peer to peer exchange. but it can be nice to have easier, cheaper, and privacy preserving on and off ramps into this ecosystem, something this kind of stiff regulation is fighting against.

If you're a regulator, having all of the transactions on the interface between institutions and individuals pinned to PII, following money around the public ledger becomes significantly easier.

If you're, say, a drug dealer only taking bitcoin, the police just have to buy some of your drugs and watch where the money goes to have a pretty good idea of all of your clients, your entire business history, and the names and addresses of your customers. It is perhaps sometimes technically possible to have good OpSec and launder the crypto so it can't be traced, but this is really hard and not making big mistakes is as well (and people breaking laws are often pretty stupid about it).

Unless you are very competent and very paranoid, the advertised benefits of crypto are very hard to achieve.

The advertised benefits - non custodial ownership and peer to peer exchange - still work fine. Privacy is not a design goal of every chain but even on a public chain like Eth it’s easy to use privacy solutions like Tornado and now Aztec to achieve a level of privacy most of us would say is adequate - a similar level as Tor and E2EE messaging apps.

This regulation does little except to add an extra hurdle and unnecessary additional costs for average CEX users who want to withdraw assets to a wallet on the network.

Looks like yet another reason to switch to modern crypto currencies with low transfer fees.

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