Re: Do ICO's need KYC and AML checks or will that kill innovation?

Quote from: pearlmen on October 30, 2017, 01:12:27 PM

Quote from: CryptoSpark on October 25, 2017, 09:56:28 PM

Is it inevitable or even desirable for blockchains and their ICO's to become more regulated or to least run their ICO's in more risk averse ways such as submitting to AML and KYC checks?
Atlas City Finance has just begun its 1 month pre-ICO which is expected to be popular in part due to the large 30% pre-ICO discount but to offset this the ICO is unusual in that it is being run against a set of AML and KYC checks to protect the business, the blockchain and investors. The question remains whether requiring such strict rules to be applied to investors will deter investors or attract more traditional investors who welcome more voluntary regulation.
Smaller investments up to 1 BTC in value dont need KYC or AML checks but larger investments can be used to move money illegally which is why such checking can be helpful. Since Atlas City Finance is really trying to establish market credibility for its other products and services such as Plutous then it makes sense to be over cautious of how the Olympus blockchain is funded. It remains to be seen how ICO investors will react to such checks being carried out and itll certainly be of interest to other upcoming ICOs who are considering how to present their coin offerings.

A presentation that combines Plutous and Olympus is provided in the following link. The ICO is just for the Olympus blockchain and its Olympian coins but this presentation looks at the wider Plutous financial services platform and how it makes use of the features of the Olympus blockchain to provide scale, anonymity and smart contracts in more familiar programming languages.

For full disclosure I'm involved in the blockchain and Atlas business but I find the wider question of whether AML and KYC's protection is good or bad for the blockchain industry as a whole very interesting. Sure it makes sense for a commercial organisation in the financial sector but is it over-restrictive for startup's looking to raise money quickly for without being too intrusive into funding sources? What are your views on these kinds of test or regulations more broadly?

https://www.atlascityfinance.com/media/AtlasCityFinance_BusinessPresentation.pptx

There is no way this will not affect the amount of people who will invest in ICOs. I personally had an experience. There was this iCO I can't remember but I was interested in it so I checked it out. The moment I got to the site and realise the amount of information they were asking all in the name of KYCs, I just close the tab never to go back there again. The amount of information they were asking is not something I am comfortable to share on such site and I am sure a lot of people would also turn back because of that.

I do sympathise with you because I'm a privacy advocate myself. It's a really difficult line to walk though, I think it has to be an individual decision for each ICO operator.

If it's an ICO that can exist entirely outside of the traditional banking system so it gets paid in crypto, stored its money in crypto, pays its staff and bills in crypto then there's less legal need to go the KYC/AML route. The problems really start when you have to work with traditional banks. Raise $10 million in BTC then try to deposit it to a bank so you can pay salaries and office space and you'll find the bank will want to know where the money came from and if it was investment then show AML and KYC compliance so they know it's clean money. Banks get punished if they don't check the source of money, just look at what happened to HSBC when they turned a blind eye in South America.

In our case we provide financial services which involves banks and other financial service companies providing specialised financial services so we have to interface with banks. We also have to pay the bills in non-crypto. For some other organisations it may be possible to live entirely in crypto, I hope that's a place we can all get to in time but for now its difficult for anyone planning to do something real with their ICO earnings. If someone is truly setting out to raise $100 million from an ICO without KYC or AML then it means they don't plan to bank any of it which likely means they don't plan to spend much of it doing what's in their plan which means they're probably planning to just sit on it and get rich, unless they live in a place where staff, offices, utilities and life can be paid for in crypto.