Will KYC stunt or spur the Electroneum (ETN) growth?

On October 5th, Electroneum came out with this announcement:

“Bringing in KYC is a huge deal for Electroneum – today is a landmark day for us and cryptocurrency as a whole. We’ve paved the way for a new type of cryptocurrency, one that is open and transparent and wants to be used as a true means of payment and be a force for improving people’s lives.

It’s a hugely exciting time – and hopefully will provide the springboard for many, many more!”

The intentions behind KYC (Know Your Customer) are well intended. To prevent terrorists, criminals, money launderers, and tax evaders from accessing financial services. And, in fact, the requirements are pretty straightforward. Customers need to verify that they are who they say they are. Plain and simple. But it goes against the core ideas of the cryptocurrency movement: individual freedom and sovereignty over one’s funds and private data with no Big Brother backdoors.

Unlike with regular money, one doesn’t need to interact with a third party to transfer funds with cryptocurrencies: this is what its decentralised nature is all about. Where there are third party banks overseeing transactions, there is room for a regulator to provide institutional oversight and monitor transactions to curb money laundering, the financing of terrorism and the like.

The question is, then, does identifying crypto holders via centralised authorities defeat the object of cryptocurrency? A big portion of Electroneum community thinks so.

ETN aim to make the lives, especially of unbanked people with no money or no money to invest, better. A cumbersome KYC process doesn’t really fit in that philosophy, does it? Just take this user’s example:

“Hello everyone,

First of all I think the Yoti app is useless. I contacted their support and they are saying that I can’t add an address manually until I provide the passport.In other words, I need to be able to add the address manually because I DON’T HAVE A PASSPORT and they are telling me that I should use my passport ( which I don’t have and it’s the only available option in my country ) to be able to add the address manually ???!!!

I want to complete the KYC since I don’t want to use a cli or paper wallet or an exchange to store my etn.

So for a customer like me, the only way to complete the electroneum KYC process is to go to the authorities and ask for a passport which costs around $60 and takes 2 weeks to be delivered to be able to use it in the Yoti app which is mandatory. And just then send Electroneum other documents to be approved for Level 3 ( which I need since I have more than 10k € worth of etn ).

Knowing that most citizens in my country don’t have a passport (and I believe it’s the same case for other countries electroneum is targeting for mass adoption), do you think electroneum can achieve mass adoption this way ?”

Another one explains his stance:

“I too have concerns with KYC going against the grain of our dear “enablement” currency. While I understand KYC is important and necessary, I’m afraid it will dissuade many people ETN is aiming to reach. I sincerely hope your issue is resolved, and I hope Yoti can begin accepting more country-specific identification cards such as drivers licenses.”

There is no doubt that regulatory compliance is a no-brainer if you aim to work in the corporate world of the West, which Electroneum obviously wants. The philosophy “… for the unbanked” now appears to be just a marketing slogan. You can’t have both, because if you didn’t notice, corporate West is anything but unbanked. If you want to make deals with large businesses, the crypto world may not be regulated, but you can bet your house the business ones are, and getting inline with the business regulations, like KYC, is a good way to alleviate concerns for them. Its a good decision for massive growth, in the corporation world.

The questions for Electroneum is: are they aiming the “poor and unbanked” or the corporate bankers that not only own bank accounts, but the entire banks? And does corporate world has any real need for ETN? I don’t think so.

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Damian Booker
Damian Booker

First thing to know about Damian is - he HATES shitcoins and has declared a war on them! Damian is a bitcoin hodler since early 2013. He used to mine Ethereum back in the day as well. Nowadays he likes to discuss bitcoin and its potential influence on the society organisation and governance. Damian hates fraudulent projects and his mission is to shed light on the maggoty scammers that have invaded the crypto space with their zero-value projects.

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