The patent describes an enforcement mechanism, noting: “the user accounts that fail compliance are flagged to indicate non-compliant accounts … corrective action is executed only for the accounts that are flagged as non-compliant accounts.”
If and when Coinbase intends to implement the newly patented system is unknown. While KYC and AML requirements and enforcement are the norm in mainstream crypto exchange these days, some seemingly arbitrary factors to be calculated by AI, such as “due diligence” are a cause for concern in those questioning the merits of such systems. Not to mention the sheer level of personal and private details to be examined.
Redditor u/Zinclepto addresses the Coinbase patent in a recent post writing:
KYC measures in this space are extreme and beyond what’s required by law. Where does the line get drawn?
He continues: “At what point do people stand for privacy anymore? These measures take control away from individuals and give them to financial establishments whose goals are self serving. Do people just simply not care about individual liberties anymore? If people do care, why are we collectively being so silent while this occurs?” Another Redditor says “Reported to authorities if the transaction is more than 2k? Wow that can’t be serious,” addressing a focal point in the patent that details:
…the investigator also determines whether the transaction that has resulted in non-compliance is larger than $2000 USD (a predetermined amount). If the transaction is larger than $2000 USD, the investigator … considers filing a report with the relevant authorities.
Other commenters call for permissionless, peer-to-peer trading privately, while still others question the very legality of the proposed practices. “You don’t have to do business with conbase. Find another exchange,” one user replies.
The phenomenon of ever-constricting KYC and AML requirements is not limited to Coinbase, however, and as regulations on crypto are still vague and lack uniformity in many political jurisdictions, exchanges are pressured to adhere to the strictest interpretations of laws possible to legally protect themselves. The inter-governmental Financial Action Task Force (FATF) continues to exercise great influence over the crypto space, since the release of its new guidance in June, and governments have little choice but to begin implementations to adhere to prescribed policies.
What do you think of the new Coinbase patent and KYC/AML regulations? Let us know in the comments section below.
Images courtesy of Shutterstock.
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The post Coinbase Patents AI Compliance System to Monitor and Flag Accounts appeared first on Bitcoin News.
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