MyEtherWallet—or MEW for short—has added fiat withdrawals to its long list of features. Users of the popular Ethereum web wallet can now seamlessly convert their crypto holdings to Euros or Swiss Francs, then deposit those funds directly to their bank account.
What’s more, the feature will not require users to submit identification as part of a KYC procedure, something that most competing services require. And even though the option is mostly of use to European investors, MEW’s decision could kick off a trend of KYC resistance.
No Need For ID
To execute withdrawals, MEW relies on a third-party fiat gateway called Bity. Fiat gateways are simply services that convert crypto to cash, or vice versa. Brokers and exchanges usually provide these gateways, although some blockchains are attempting to integrate the feature as well.
Of course, local regulations determine the procedures that any given gateway must adhere to. Bity is based in Switzerland, and the country’s regulations indicate that Bity doesn’t have to collect user information for small amounts. Other countries require KYC far more often than Switzerland does.
Bity does, however, comply with Swiss anti-money laundering (AML) laws; it just doesn’t need to collect user data to do so. Instead, it will use proof of wallet ownership to ensure that nobody is exploiting the system. This approach ensures regulatory compliance while providing a seamless user experience.
The Rise of KYC
KYC measures have become increasingly commonplace in the crypto world. Regulators who demand KYC compliance claim that the process provides a way to stop criminal activity and terrorism. However, critics believe that KYC measures deny services to legitimate users—or that KYC simply doesn’t work.
The trend has been spreading rapidly: services that once did not require KYC, such as LocalBitcoins and Shapeshift, have started demanding identity documents from users. Entire blockchains like Civic have even evolved to deal with the issue. Meanwhile, decentralized exchanges and peer trading sites are resisting the trend.
Although KYC may be beneficial in some ways, it does put an immense burden on users. MyEtherWallet and Bity seem to be balancing regulatory compliance with accessibility—something that many platforms may have to do if they want to compete.
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