Comment by htrp
4 months ago
It feels like particularly in finance, that startups who disrupt traditional players do so without a full understanding of all the corner cases and none of the regulatory accountability which is why those traditional finance players were so expensive in the first place.
Is there any accountability for overly conservative KYC? My understanding from the whole debanking thing is no, at least in the US.
Kinda depends on how you define "accountability" of course, but rejecting paying customers is usually frowned upon in business. You want your KYC processes to be conservative enough not to get fined, but not so conservative that you lose out on potential revenue.
If you're too far off on either side, you either get fined by whatever regulator you fall under, or you get fined by the stock market because your competitors are more profitable.
Closing 1% of accounts instead of .1% of accounts for kyc reasons won't affect your revenue enough to matter to the stock market.
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There are international mechanismis for verifying that countries enforce AML stuff like KYC, but no mechanisms for measuring either how effectice it is nor what it's negative effects are.
Not even corner cases. I worked for a fintech that launched a dda-ish product that had 16 digit account numbers, issued sequentially, with no check digits. At launch there didn't seem to be a CS process for dealing with pretty obvious "customer mistyped account number and sent their money to some else's account." problem.
Feature parity with blockchains.
Not even, in cases where the company couldn't recover funds from misdirected payments they ate the loss. Though obviously I think that's a good thing.
Uh, no, most crypto wallet addresses have either a checksum or some other means of typo detection / prevention.
Chesterson's bureaucracy