KYC is shorthand for “know your customer.” Federal Anti-Money Laundering (AML) regulations define Know Your Customer standards. They define the process of verifying customers’ identities. KYC applies to all financial institutions and asset classes, including blockchain and cryptocurrency. These organizations must perform identity and background checks on clients before allowing them to use their products or platforms. Key goals of decentralized services like cryptocurrency are to allow users to remain anonymous and keep their personal information private, which sometimes puts crypto in conflict with KYC. And ongoing compliance requirements are difficult to scale for many crypto businesses.
KYC for Dash
Dash is able to stay anti-money laundering and know your customer compliant, while still staying decentralized to facilitate growth in merchant and consumer adoption. In late 2016, Dash partnered with UK-based Coinfirm to create AML/KYC compliant solutions for commercial institutions. Confirm’s analytics and AML solutions help exchanges and other crypto providers who need to analyze and manage risk. Dash users like that it enables compliance without affecting Dash’s optional privacy features. With Dash, independent organizations can use the AML/KYC features if they choose, but it is not being forced on anyone.
Former Dash Core Group CEO Ryan Taylor pointed out that some Dash businesses are “in the money services business and are subject to compliance and regulatory compliance issues, we have services on our network so [they] can integrate Dash … to do all the things [they] need to do to be compliant.” That is, organizations in AML/KYC regulated markets can make sure they are compliant, which Dash enables.
Dash CoinJoin
As we explained in our discussion of privacy, Dash’s CoinJoin makes it difficult for an outside observer to determine the source of funding. It makes using Dash more like pulling cash from an ATM. Coins are “mixed” using denominations. It’s a feature, not a requirement. Thus, Dash enjoys both sides of the privacy coin.
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