This is a summary of the op-ed “Privacy Isn’t Just an Edge Case for Crypto” by Leah Callon-Butler, published on CoinDesk on November 28, 2022.
During a side panel around the week of TOKEN2049 Singapore, a speaker on the topic of DeFi adoption across Asia said the last thing Emfarsis Director Leah Callon-Butler was expecting to hear: “If you’re not doing anything dodgy, why are you so resistant to KYC (know your customer) and AML (anti-money-laundering)?”
Although KYC can play a role in detecting fraudulent players, the KYC process can be a barrier in developing countries that lack good systems when it comes to identification documents. The speaker acknowledged these barriers, but he still argued that KYC is essential to keeping DeFi compliant with law and order.
The problem is that KYC has proven to be a horribly ineffective tool in reducing financial crime. And because most of these crimes still go through traditional banking systems anyway, there is little to no point in enforcing KYC requirements in DeFi protocols. Additionally, public blockchains are open, transparent and immutable ledgers that anyone can access, making it easier for law enforcement to track and trace criminal activity. Paired with privacy-protecting technologies, such as zero-knowledge proofs, blockchains become the foundations of a system that could do a much better job of balancing the right to know with the right to privacy.
Privacy-preserving behaviors exist on a bell curve — some are harmful actors and some are freedom fighters who are against oppression. With that premise, it’s hard to put a blanket judgment on why people want to keep their financial lives private. In the world of DeFi, privacy shouldn’t be an individual’s responsibility, but a default feature as it is a basic human right for everyone.
Read the full article here:
“Privacy Isn’t Just an Edge Case for Crypto” by Leah Callon-Butler
Published November 28, 2022 on CoinDesk
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