Knowing your customer

[Declan McCullagh]

A minor clarification: The formal proposal known as "Know Your
Customer" was withdrawn (see my back articles on that topic). But
other regulations in the same vein require banks to require ID. 

-Declan


On Tue, Dec 05, 2000 at 11:18:53AM -0800, Greg Broiles wrote:
> On Tue, Dec 05, 2000 at 06:40:08PM -0000, lcs Mixmaster Remailer wrote:
> > Payee traceability had nothing to do with it.  Every customer of MTB,
> > whether an end user or a merchant, had to fully identify himself to the
> > bank, including SSN and for merchants, type of business, etc.  This is
> > SOP for other payment systems like credit cards.
> > 
> > It was on this basis that MTB was able to screen their merchants.
> > No payee tracing was necessary.  A fully untraceable cash system would
> > have been equally amenable to merchant screening.  Any vendor has the
> > right to control whom it does business with, and MTB chose to exercise
> > its discretion in this way.
> 
> I don't know if MTB had a lot of discretion - banks are subject to the
> federal "know your customer" regulations. You can't get depositor
> anonymity from a bank chartered in the US, at least not without at least
> one level of corporate indirection (e.g., the bank "knows its customer"
> who is a domestic or foreign closely-held corp, who does the bidding of
> its unidentified-to-the-bank-and-FINCEN shareholders). 
> 
> > The Texas couple in the news recently made a different choice and
> > decided to provide payment services for child pornographers, as James
> > Donald recommends.  Now MTB is still in business (after merging with
> > MTL and then FSR) and the Texans are in jail.  Which made a better choice?
> 
> Sounds like the Texans knew too much about their customers - if they
> operated a content-neutral service which had many, many customers,
> one of whom happened to be a child-porn service, they'd be doing fine,
> especially if they shut off the child porn people if/when notified by
> law enforcement of the activity. Does the FBI shut down AOL and Earthlink
> when their subscribers traffic in child porn? 
> 
> --
> Greg Broiles gbroiles at netbox.com
> PO Box 897
> Oakland CA 94604
>