Honesty and transparency is what blockchain and cryptocurrencies are all about. Unfortunately, those who repeatedly follow the law are often treated like criminals. A new report by ShapeShift may be able to shed some light on why companies are starting to get tired of dealing with the United States Government.
ShapeShift is based in Switzerland. Ironically enough, the exchange has received 18 subpoena requests from the United States government in the last year alone. According to data from ShapeShift, the United States government is responsible for over 30% of the requests the company received.
This is by no means a unique set of circumstance which involves only ShapeShift. Kraken is another huge crypto exchange. The company released its transparency report earlier this month and what do you know?
The report shows that more than 66% of the requests were filed by, you guessed it, the government of the United States. What’s even more troubling is that the report further revealed that US-based investors make up less than 20% of the user base.
When asked about the requests, Kraken responded:
“Clients from the United States are less than 1/5th of our total clientele, but requests from the US are more than 2/3rds of the total amount of requests. For a majority of the requests, we simply have no matches. We truly believe that the United States agencies and government are sending those subpoenas to everyone and they simply hope for a match to be found.”
Overwhelming Know-Your-Customer (KYC) requests filed by the United States authorities is not just a problem for the crypto sector. Many others including fintech are feeling pressured by US authorities to deal with a wide range of regulatory issues on a very large magnitude.
Despite claiming otherwise, the United States government seems to embrace the role of “World Police”
It doesn’t seem to stop the United States government that a business is not based in the US. KYC requests to crypto, fintech and other sectors are send non-stop.
“They are allowed to get away with this because of transparency. Our company has always made all transactions through our system public – unlike all banks and financial companies. Upon the completion of an order, the transaction details are published on our website via our APIs.”
Startups are not safe from having to deal with the US government if they relocate. In the long-run, compliance will become a core discussion point for VC firms and potential angel investors simply because of the high costs involved in dealing with a seemingly endless amount of requests.
You can also check out:
- CENTRE Consortium Expanding: More Members Gain Access to USDCs - Jun 14, 2019
- Bitcoin Theft has to be Answered Personally by Craig Wright - Jun 13, 2019
- Blockchain-based Tools to be Used After Improvements from Microsoft - Jun 12, 2019
- CCN Shutdown and The Inevitable Surrender to Google’s Power - Jun 11, 2019
- Ban Bitcoin ATMs: Money Laundering Blamed on Crypto ATMs - Jun 10, 2019
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