My impression, from this forum as well as the recent Twitter Space, is that this issue isn’t entirely settled and the Dfinity team still need some space to consider the consequences.
KYT for crypto is nascent and confused, and neither the philosophical basis nor the legal ramifications have been fully established.
I don’t blame the team for delays at this point. If anyone thinks this is a simple issue, imo they probably don’t understand it.
It seems a complex issue we still don’t have an answer on is what happens to quarantined “tainted BTC”.
@Manu do we have a sense yet of what happens to tainted BTC that gets sent to the minter? Can it get sent back?
I think he already answered in one of the twitter discussion that this tainted btc will be confiscated.
I feel that ICP should be staying on its roadmap of building the IC and not complicating the system with maintenance from marketers.
It seems to me that if we adopt outside of the roadmap then we will create ongoing cost and maintenance and move our attention away from the things we should spend time on.
My neighbor decided to get a dog as everyone out there is getting one and while I love animals I don’t follow the marketing bs.
The outcome 12 months later is they have paid thousands for the animal, then ongoing vet bills, constant walking the dog, repairs to their property and so on.
When my neighbor asks what I am doing today I respond with, Anything I want I don’t own a dog.
Don’t fall into the trap of Marketing that you need us and we will make your life better, nothing has changed for centuries. With all the law enforcement out there, there will always be work, maintenance and cost for them to do.
I believe that telling my neighbor that his decision for the small amount of goodness that comes from owning a dog will be outweighed by the maintenance would be met with argument and dismissal.
I like to think that the only way to learn is to let them do as they want and learn the hard way.
Let’s not learn the hard way, you are the one responsible at the end of the day for your mistakes and should have done the research before following the crowd and picking up dog shit.
It makes sense to me that permissionless DeFi will become a thing of the past.
If regulators crack down, and I think they will, they’ll want to ensure DeFi applications 1) are not facilitating illicit transactions and 2) users are paying tax.
I wonder if uniswap will be able to get away having their front end that doesn’t do any KYC or tax compliance forever… I just don’t see it happening.
Look at Coinbase. Look at Binance. The dominos are falling. The whole our users aren’t American we don’t know if theyre using VPNs or not isn’t going to fly anymore.
I expect a sea change on this front. Ever since FTX the regulators are really not happy and they will shake things up. I think…
Are you sure? I saw a problem on UTXO. Please check from the beginning to the end. Thank you.
Any update on how things are going?
Hello everyone
Hope you are all having a good day.
I am new to the forum and have been a trading ICP from 2021. I am a day trader whose sole income is crypto markets.
Since, I am not a developer, please forgive me for asking a question which may be obvious to you but someone like me may be struggling to understand.
What I understood from Dfinity R&D videos and blog posts is that ckBTC is basically wBTC that works in the icp Blockchain. I know there are technological and use differences. It would be nice if there was a post mentioning it.
My question is mainly concerned with tainted btc. I have never heard of tainted btc with regards to wBTC and everything can get exchanged seamlessly in Dex’s. Why bring it up for ckBTC.
Good question.
Here is my understanding from reading Jan and other’s posts (so take it with a grain of salt):
I also had not really heard of tainted BTC being an issue before
After talking with others in the industry, it seems it is an issue in CEX’s (and more and more).
This is brought up in ckBTC because:
a. users of ckBTC may have bad user experiences where they find they swapped BTC for ckBTC and then get back BTC they cannot use at CEX’s. Bad user experience.
b. Regulators are increasingly concerned with software that could act for money laundering, as has happened in US, EU, and other places:
Fwiw KYT is a welcome feature. I don’t think most others have this and it will become increasingly more important over time.
The only issue is that what if that BTC is declared bad after it has been exchanged for ckBTC?
Still wondering if there’s any update on this? When can we expect to have the minting and conversion of btc/ckbtc in the NNS UI?
Cost: Implementing KYT can be costly, particularly for smaller financial institutions. Solutions to this challenge include outsourcing KYT to a third-party provider or using open-source technology to reduce costs.
Data Quality: KYT relies on high-quality data, which can be difficult to obtain and maintain. Solutions to this challenge include investing in data management systems and processes and establishing data-sharing agreements with other institutions.
False Positives: KYT systems may generate false positives, which can be time-consuming to investigate and can result in unnecessary reporting. Solutions to this challenge include refining KYT algorithms and rules-based systems to reduce false positives and investing in staff training to improve the quality of investigations.
Limited Resources: Some financial institutions may have limited resources to dedicate to KYT, particularly smaller institutions. Solutions to this challenge include prioritizing KYT activities based on risk and investing in automation to improve efficiency.
Emerging Technologies: Emerging technologies, such as cryptocurrencies and blockchain, present new challenges for KYT. Solutions to this challenge include investing in research and development to stay up-to-date with emerging technologies and partnering with technology providers to leverage their expertise.
I can answer your question. Wrapped Bitcoin on the Ethereum network is a product that requires both Know Your Customer and Know Your Transaction checks. To obtain wrapped Bitcoin, you need to send Bitcoin to a custodian/merchant who performs a transaction check on your Bitcoin and mints the equivalent token. Therefore, there is no need to worry about the legitimacy of your Bitcoin as a trusted entity has already taken care of the matter. KYT checks can include looking at the patterns of transactions, checking the source and destination of transactions, and looking for other signs of suspicious behavior. For instance, if BTC comes from an address flagged for illegal activity, the custodian may refuse the transaction or ask for more proof.
If the custodian becomes aware that the BTC that was sent to them to mint WBTC was stolen, the custodian may have a legal obligation to freeze or seize the funds and cooperate with law enforcement agencies to investigate and potentially return the stolen BTC to its rightful owner.
The exact legal framework for this may vary depending on the jurisdiction in which the custodian is operating and the specific circumstances of the case. But in general, custodians are expected to take reasonable steps to stop the acceptance of stolen or illegal funds and to work with law enforcement to look into and solve any cases where criminal activity is suspected.
IMO, ckBTC is a better version of this, as the entire minting procedure is done via smart contract while still providing similar security checks for those who want to hold cKBTC.
Hopefully, this answers your question.
KYT can also be received, otherwise the BTC of IC is a BTC mixed coin pool, bigger, sooner or later will be banned by the United States
A security exchange, also known as a stock exchange or a securities exchange, is a marketplace where stocks, bonds, and other securities are bought and sold.
It provides a centralized and regulated platform for investors and traders to trade securities, thereby facilitating capital formation and providing liquidity to the securities market. Securities exchanges typically operate as for-profit organizations and can be either physical or electronic in nature.
Some of the most well-known securities exchanges include the New York Stock Exchange (NYSE), NASDAQ, and the London Stock Exchange.
I do not see any of that going on in the IC when our investment for me is locked for 8 Years, unable to exchange anything.
Do KYT fees only affect converting of BTC to ckBTC (i.e. deposits)? Is this different from the fee returned by get_deposit_fee in the ckbtc-minter.did?
Do KYT fees only affect converting of BTC to ckBTC (i.e. deposits)?
Yes, get_deposit_fee is for BTC to ckBTC.
estimate_withdrawal_fee + kyt_fee for ckBTC to BTC
Is this different from the fee returned by get_deposit_fee in the ckbtc-minter.did?
get_deposit_fee returns the kyt fee. This endpoint will be removed in the future in favor of get_minter_info.
Just to clarify, the answer is “no”, a KYT fee is levied when converting BTC to ckBTC and vice versa.
@1eo provided the details: When converting BTC to ckBTC, the KYT fee is the only fee. When converting ckBTC to BTC, the fee consists of the withdrawal fee and the KYT fee.
KYT happens on withdrawal? How and why?