Interesting article released today regarding new regulations from FinCen.
Has anybody been thinking about how these new regulations for MSBs (i.e. ILP Connectors) will impact that future development of the network? I feel like with these new regulations we can expect KYC on ILP connectors and even tax collecting to occur.
I’m curious if anybody has thought about the potential implications of such regulations and how to go about dealing with them. Abviously this will also impact other projects like lightning nodes for example so we’re definitley not the only group that will be dealing with this.
I brought up these concerns at the summit. It seems we received clarity sooner than we expected and it was something many of us don’t like the sound of.
I think we should look at these requirements now and integrate into the protocol if appropriate ASAP so we can have compliant business in jurisdictions that require these kinds of compliance.
The great thing about ILP being well-layered is that KYC/AML is not a protocol level concern. Connectors in various jurisdictions are free to implement any level of KYC/AML on top of the base accounting abstraction that ILP provides.
I’ve got no experience designing protocols so I won’t object.
I mean to communicate the following.
A) ILP should be developed with compliance in mind. It won’t apply to all, so it’s should be an “optional” feature at whatever level it exists.
B) If there is something that could be developed and standardized that aids in this process… Perhaps integrating a KYC/AML “extension” or “plugin” would help developers deploy ILP solutions more efficiently.
Or does this kind of business logic not going belong anywhere in the official ILP repo’s or documentation?
I worked on KYC/AML with bank before. And standardizing that, oh god, trust me it’s no joke. We spent more than 30M to get it done, even then there’s plenty left. I don’t think it can ever be done on protocol level and I wouldn’t recommend going that route.