Bitcoin is, just like any other form of electronic or cash payment, subject to Know-Your-Customer regulatory requirements. Even though a lot of people flock to Bitcoin because of the illusion of being anonymous online, there is very little anonymity to be found in the world of virtual currencies. That being said, blockchain technology could be used to facilitate the KYC process, which is exactly what Tradle is trying to achieve.
Tradle – Uniting Blockchain Technology And KYC Procedures
One of the main reasons why Bitcoin companies face more scrutiny in terms of Know-Your-Customer regulations compared to traditional financial services is due to pseudonymous transactions. Bitcoin transactions have no personal information attached to them, as there is no name, address or phone number associated with wallet addresses.
For multiple governments around the world, this is a major worry, as it is impossible for them to tell whether or not Bitcoin transactions are legitimate, or an effort to launder money. As a result, most bitcoin companies – specifically exchanges- have very strict KYC regulatory requirements they have to adhere to, including customer identity verification.