An important article on CoinTelegraph was just published, highlighting KYC risks, in which I’m quoted, alongside Susie, Evin & Lyudmyla.
In a nutshell
Revolut is the latest KYC casualty - a leak reported last week, when a hacker impersonating an Italian government agency tricked Revolut into handing over customer passports and verification selfies. The attackers have begun publishing some of the files, are reportedly demanding $3M ransom.
680 customers are reported affected. Earlier this month, more than 153 million US and Canadian driver's licenses were stolen, apparently from an identity verification provider. KYC forces companies to store identity documents, turning every copy of these documents into a honeypot for hackers.
The article puts the emphasis on Zero-Knowledge tech as the key solution for the KYC problem. I highlighted the shortcoming of ZK proofs (below), and I agree with Evin that “You cannot lose what you never held,” hence not storing any identifying data is ultimately the best solution.
One of my quotes in this article:
"The incentives point toward control, not privacy.
Zero-knowledge proofs let someone prove a fact, like being over 18 or not on a sanctions list. What’s missing is what that proof gets bound to. Right now it’s usually bound to an account inside someone else’s database, so people stay dependent on a centralized intermediary.”
Evin McMullen, CEO and co-founder of Billions Network:
“..the barrier was “never the technology,” but the rules, incentives and infrastructure built around it: “This is a governance and standards problem wearing a technology costume.”
Lyudmyla Kozlovska, Open Dialogue president:
“EU laws meant Revolut had no other option but to comply.
EU AML law imposes no verification duty on the bank and provides no meaningful mechanism to check who is really behind an authenticated state request. Refusal to answer carries fines in the millions. In practice, verification is impossible.”
Susie Violet Ward, co-founder of Bitcoin Policy UK:
"We need to stop treating identity verification and surrendering your identity as though they are the same thing.”
The full article by Christina Comben: https://cointelegraph.com/magazine/revolut-id-thefts-highlight-kycs-dangers-heres-how-to-fix-it
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