The Tezos Foundation announced today that activation of Tezos tokens from the fundraiser sale in 2017 will be contingent upon each contributor completing “Know Your Customer / Anti-Money Laundering” identity verification. This requirement will only apply to contributors who sent funds directly to the project using Bitcoin or Ethereum. Contributors who sent funds by way of Bitcoin Suisse were already subjected to identity verification so this announcement does not apply if you contributed through that method.
What is KYC/AML?
According to HackerNoon, KYC is described as “a process of obtaining relevant identifying information about the customers of a service,” which mandates that all customers must “submit appropriate identification documents like photo IDs.” The purpose of such a requirement is to ensure that unqualified people are not able to access a financial service for nefarious purposes. In this case, the Tezos KYC requirement is primarily concerned with validating the identity of fundraiser participants to prevent fraud.
The same article describes AML as “a variety of regulations that are enacted to prevent the generation of income via illegal and illicit transactions.” The AML requirement for the Tezos launch specifically deals with ensuring that individuals on criminal watch lists or entities under international sanctions are unable to participate in the platform or use illegal assets to participate in the Tezos network.
Why implement KYC/AML?
According to the Foundation, the implementation of KYC/AML stems from a need to “verify that contributors meet basic KYC/AML criteria.” During the time of the original fundraiser period in July of 2017, there were few regulations governing how a cryptocurrency fundraiser should be carried out or whether verification, such as KYC/AML, should or should not be required for participation. Since that time, in just under 12 months, the regulatory environment has changed and government scrutiny is now much stronger when it comes to cryptocurrency projects and access to the traditional banking system. In order for the Foundation to function in this environment, the implementation of KYC/AML verification will allow the Foundation to “support activities that will advance the Tezos protocol, its community, and open-source technologies.” We don’t yet know which aspect of those operations created the need for verification but further details will be forthcoming as the Tezos network launches.
How do I get verified?
At this point, according to the FAQ, if contributors are unable or unwilling to participate in verification, then fundraiser tokens cannot be released. No other details on this, such as the possibility of refunds for those unwilling to participate, have been disclosed by the Foundation at this time.
What is the deadline?
According to the FAQ, there is no deadline to complete verification and the verification process will be available before and after Betanet launch. There is no need to rush immediately and perform verification for fear of missing a timetable.
It is important to note that these KYC/AML requirements are in no way associated with other regulations concerning accredited investors, nor will they act as a way to prohibit citizens of certain jurisdictions, such as the United States, from participating in the Tezos launch. As the Foundation states in the FAQ, only basic identity requirements are being confirmed with no regard for residency or investor accreditation.
Please read the full Tezos Foundation KYC/AML FAQ page for more details and instructions on how to participate in verification and complete the process.