Libra Compliance

Greetings,
I’d love to start the discussion on Compliance, specifically KYC and AML. Each country has it’s own variation but G7 has put out well known standards. In this topic I’d like to discuss the specifics of Compliance, s.a.

  1. How KYC will be enforced during the on-boarding and on-going, especially when 3 party provider creates a wallet?

  2. How AML is monitored and reported? Who generates SAR?

  3. What’s the level of the integration required between the Libra financial transactions and the social site to satisfy regulatory compliance and how Privacy concerns are addressed in this case?

I think current Libra KYC and AML is done on the wallet level, more specifically or likely, in terms of fiat in-out

Michael_NodePacific - It does make sense, but in that case who and how enforces AML and other screenings (e.g. OFAC)?

under current Libra governance, it should be wallet or payment providers’ responsibility to compliant with local regulator requirements. For example, Calibra gets US licenses to acquire US customers.

Similar to current traditional payment system, it is bank’s responsibility to screen KYC customers not SWIFT.

Michael_NodePacific - That’s implied and well understood, but raises additional questions:

  1. Who and how will validate that a wallet provider indeed complies with all local regulations while keeping user experience at the high satisfaction levels? Libra Association? What’s the process?
  2. Who carries the liability if the wallet provider doesn’t comply?
  3. How Libra becomes a true global coin enabling global eCommerce using a single customer wallet when regulations around the globe are different and a single customer wallet must satisfy all of them?

Local authority will provide guideline for wallets. At this moment, crypto wallets are regulated under FINCEN and Money transmitting licenses, for example in USA (so local authority). I do not think Libra association currently have framework to regulate wallets, although I suggest Libra main-net should build some APIs for regulator to connect and monitor on the Libra level.

As you said, single wallet with local authority cannot bear the responsibility for the global transactions easily. Having said that, Libra’s mission is for those living in the third world cannot afford the transaction costs. Usually they do not have a strict local authority.