VISA & MasterCard ban on Crypto

Crypto, by design, is not KYC and AML-compliant.

Alex Kleydints
Nov 6, 2018 · 3 min read

Unlinking VISA and MasterCard from Crypto

The high-risk categorisation essentially means that merchants and brokers, which are somehow connected to Crypto, may see their merchant accounts frozen or terminated.

Why is this happening?

Although Crypto will over time make banks and card issuers completely obsolete, this is not the reason why the card issuers are implementing the ban. Most likely it’s the lack of KYC and AML compliance, which today is a legitimate issue. Every player in the current financial model needs to be KYC and AML compliant.

We are starting to witness a clash between the centralised financial system, which is bound by KYC and AML regulations, and the decentralised regulation-free and anonymous Crypto community.

In the centralised financial system banks perform the KYC & AML compliance checks

Card issuers always relied on banks to perform the needed KYC and AML compliance checks. That’s why, in most cases, you got your credit and debit cards via banks. Banks always check your identity and continuously monitor your transactions, to check for suspicious activity for AML compliance.

Banks are the gatekeepers to the centralised financial system. They perform all the needed KYC and AML compliance checks.

That’s why when you pay with a VISA or MasterCard, you don’t have to go through KYC or AML checks every time. The Merchant can trust the bank to check the KYC and AML compliance of your funds.

Crypto, by design, is not KYC and AML compliant

Anyone can create a wallet and can put any amount of Crypto in that wallet. No one checks the identity of the person who created the wallet or the source of the funds in that wallet.

In Crypto there are no gatekeepers, which check the identity of people or the source of funds. That’s why Crypto is incompatible with the KYC and AML regulated financial system.

Conclusion

By its design, Crypto is incompatible with the strictly KYC & AML regulated financial system.

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Alex Kleydints

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Coding — Taking a 100% break from Social. Will be back on September 1st, 2019

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