How to identify Money Laundering (AML/KYC) in ICO's (Initial Coin Offerings)

in blockchain •  7 years ago 

Know your Customer and Anti-Money Laundering can not be relegated to another party. Since it's possible to simply create or receive Cryptocurrencies, create or participate in an ICO , what is stopping the the black-market?

In another sense, much of the crypto-currencies that are around are the proceeds of black money, and more often than not, regardless of the diligence by the offender, a trace remains between the analogue and digital worlds. A lot may think that a better "Identity blockchain" could be employed to trace private investment and distinguish it from illicit activity, or a register of private investors who have to disclose their Public key to be allowed to invest and take on the term "Sophisticated Investor".

Anti-money laundering embedded within a Smart Contracts is the only Interface specification required to obtain a Digital ID and verification of that ID requires a lot more thought before AML becomes a real and proper danger to ICO sustainability.

ICO's without any form of AML push back on a Token purchase, do little to inspire investor confidence.

Although it's possible to just send ETH to a Contract Address , the technology advantage does not make it acceptable to fund terrorism.

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