KYC compliance, the regulatory standards that demand to know who you are and what you are doing with your money, are being adopted by Bitcoin exchanges more and more. But with hacks as large as the OPM hack and the high costs of Identity theft, is this secure?
KYC, AML and ABC (Anti-bribery and corruption) compliance are water to the sharks, whales and bubble fish of the financial industry. The collection of customer identity and activity data is such a tradition that even during a recession, the compliance officer industry is booming. Regulator’s role is to pressure banks and exchanges into compliance, while law enforcement attempts to hook onto the bigger fish.
This relationship has intensified over recent years with increased pressure on financial institutions to collect and mine user generated data. This is driven in part by a large uptick of ‘financial crimes’ and fraud of the legacy financial system.
According to BankTech, “’In 2011 banks and financial institutions generated more than one million SARS (Suspicious Activity Reports), of which the IRS reviewed 775,000. Thus far in 2012, the IRS has reviewed 500,000 SARS with case size in the hundreds of millions of dollars.” Producing a