Can KYC and Permissionless Money Co-exist? In light of the recent arrest
of the founders of Tornado Cash, a decentralized private payments protocol built
on top of the Ethereum network that severs the link between sending and receiving wallets, some are questioning whether
Know Your Customer (KYC) laws and permissionless money can co-exist.
“Does bitcoins lightning network help facilitate untraceable anonymous financial transactions?... does Meta Mask do KYC?”, asked crypto influencer
CryptoTea on Twitter.
“What's stopping the cops from arresting the developers of meta mask and lightning labs?” she continued, adding that it is her understanding
“that KYC laws and permissionless money can NOT coexist”.
According to an explainer on Kraken,
most micropayments made using the Lightning Network, a layer-2 payments protocol built on top of the Bitcoin blockchain,
will be “nearly untraceable”.
Meanwhile, users can set up a wallet using wallet service providers
such as MetaMask without submitting any personal information, as is required when setting up accounts on platforms
bound by KYC requirements.
