Why KYC/AML are an attack on civil disobedience
and surveillance is an act of violence
The Salt March started with Gandhi and 78 volunteers that were later joined by over 50000 people. This led to more acts of civil disobedience across India as result of which around 60000 people were arrested by the British police. But they still couldn’t stop the march. Now imagine a world where, thanks to KYC and facial recognition, all those who join the Salt March can be instantly identified, unbanked and de-platformed. How many would have dared to join Gandhi in such world?
Surveillance is an act of violence. It is even more violent than boots on the ground and 60000 arrests. KYC/AML regulations are surveillance tools masked as anti money laundering laws. In fact, there is no evidence of their effectiveness against ML. There is, on the other hand, ample evidence of their ineffectiveness. For example, it is estimated that from 2 to 5 trillion dollars were laundered in 2021 according to the latest World Bank data for that year.
[…] the anti-money laundering policy intervention has less than 0.1 percent impact on criminal finances, compliance costs exceed recovered criminal funds more than a hundred times over, and banks, taxpayers and ordinary citizens are penalized more than criminal enterprises. — Ronald F. Pol, Anti-money laundering: The world's least effective policy experiment? Together, we can fix it
Spend $1000 to stop $1 in criminal funds. For the math alone we should have discarded these laws long ago simply for being highly ineffective. Instead ,we have been doubling down at every occasion since 2001 when the Patriot marked the genesis of what would later becomes today’s KYC requirements. Why? Because they’re about control and have nothing to do with stopping criminals and terrorists.
In contrast to the average Joe and Jane, rogue actors can easily game financial surveillance laws by using banking institutions in off-shore jurisdictions with lower reporting requirements. The same tax havens used by our ultra rich tax evaders. And just like our ultrarich tax dodgers, terrorists and criminals don’t use personal accounts but hide their money behind corporate shell companies. So, again, what’s the point of KYC for Joe and Jane other than grabbing as much personal data as possible to be used to target them?
KYC/AML regulations create huge databases where the sensitive personal data of millions of people are pooled together. These include physical addresses, IDs, selfies and so on that can turn anyone into a viable target of a perfect crime. A crime with an impossible to prove culprit. One could become target of a hack, or have their identity stolen or could end up dead by getting shot exactly when nobody is looking. Like Seth Rich, or (maybe) Nikolai Mushegian or (maybe) Tafari Campbell.
KYC/AML compliance didn’t stop Epstein. It looks like they actually helped him. It also didn’t stop Evelin Banev. Or Danske Bank from laundering billions of euros. But it’s probably what got this couple of 76 year olds robbed earlier this year.
And back to civil disobedience, if everyone is only few clicks away from being identified, bankrupted, fired, robbed, kidnapped, tortured, poisoned etc. who will dare to say no to the Mad King? Only a fringe minority and fringe minorities are expendable.
The ultimate test for any law purported to be rolled out to stop crime is the Salt March test. Any law or tech that could have nipped the march in the bud is an evil law that helps rather than stop criminals. An evil law is also like a lie, you need to follow up with many more evil acts to make the evil law look fair. In the case of KYC they are following up and closing customer accounts in banks and crypto exchanges.
What happens to all the people left high and dry out of the blue because cut off of their own savings? We’re not speaking of Russian oligarchs, but households that live month to month.
KYC/AML gives criminals even more leverage over innocent people making them easier to target and defraud. Coincidentally, wealth inequality has skyrocketed since the Patriot Act kickstarted KYC legislation in 2001. Almost as if the military industrial complex has been using these laws for its own benefit at the expense of the 99%.
What can we do? Avoiding KYC exchanges is important because using them feeds the surveillance monster. Then using the onchain economy (Defi, DEXes) and familiarizing ourselves with available military grade cryptographic tools is key:
Transparent proof of work DeFi: something that is safe to use and scales without creating central points of failure is important for censorship resistance. Because of chain analysis however users can still be identified onchain and could be targeted offchain. For example they could be attacked physically like the crypto holders in this list.
Darkfi with military grade safety: the ability to disappear in a sea of encryption will be crucial to deter evil laws like KYC and, on a micro level, to make attacks from criminal organisations unfeasible or exponentially more costly.
It’s either that or we will slowly roll back in the colonialist era where an aristocracy of a select few rules over everyone and everything else.