TL; DR
-
Elizabeth Warren just found new support from nine senators for what’s being called an “anti-crypto” bill.
-
There are some provisions in it, but the hot-button issue is adding Know Your Customer (KYC) requirements to all crypto wallets (including self-custody).
-
Enforcing KYC on self-custody wallets seems like an almost impossible task. Overall, the whole thing reads like a lose/lose situation in the long run.
Full story
We feel the urge to take a very clear side at this point… but we’re going to do our best to keep things balanced.
(Wish us luck).
Elizabeth Warren just found new support from nine senators for what’s being called an “anti-crypto” bill.
There are some provisions in it, but the hot-button issue is adding Know Your Customer (KYC) requirements to all crypto wallets (including self-custody).
What on earth does that mean?
Basically, adding proof of identity via a government ID to crypto wallets (whether they are run by an exchange like Coinbase, or by an individual, like you).
The real-world equivalent of this would be something like the government asking you to keep track of how much cash you are carrying in your physical wallet at all times.
What would one be enormous exceedance.
But we can also see this from the other side!
There is only a limited amount of physical cash you can carry/trade. But with crypto you can carry billions of (difficult to trace) dollar equivalents in your pocket.
KYC standards exist to protect against fraud, money laundering, and trafficking in dangerous/illegal materials (rhymes with shmrugs and shmeapons).
That said, we can’t help but feel that this bill is doomed to failure whether it passes or not.
Enforcing KYC on self-custody wallets seems like an almost impossible task.
All users need is a VPN to comply with the requirement, while limiting the growth of crypto within the US, with a lot of red tape.
Overall, the whole thing reads like a lose/lose situation in the long run.
(For the US economy, its population and the broader crypto market).