Summary
AML and KYC policies are failing to effectively recover criminal funds, costing more than they recover and threatening privacy rights. Blockchain offers hope for personal freedom advocates, but regulators are trying to integrate it into AML processes. Switzerland’s approach to AML allows companies to define their own risk exposure, providing autonomy in financial transactions. This approach should be preserved and replicated to prevent a surveillance state and maintain personal freedoms. The current AML approach is inefficient and cumbersome, and alternative solutions should be considered.
Key Points
1. AML and KYC policies have been implemented globally over the past decade to track illegal funds, but studies have shown that they only recover less than 0.1% of criminal funds, costing a hundred times more than recovered funds and threatening basic privacy rights.
2. Despite extensive AML efforts, organized crime and drug use continue to rise, and high-profile investigations have revealed massive money laundering schemes at respected financial institutions. The lack of accountability in implementing AML rules has led to cumbersome and inefficient measures for average citizens.
3. Switzerland stands out as a jurisdiction that allows companies to define their own risk exposure, enabling people to buy reasonable amounts of crypto without KYC. This approach, based on autonomy and practical common sense, could serve as a model to prevent global AML practices from spiraling out of control and infringing on personal freedoms.