As we continue to help define Bitcoin’s Know Your Customer (KYC) best practices, we’re making a significant change to our business. Protecting our network requires the highest KYC / Anti-Money Laundering (AML) compliance standards, including disallowing anonymous transactions. We make business decisions with scalability in mind. It is not worth risking legal repercussions and longterm viability to accommodate those who favor anonymity over regulatory compliance.
When Robocoin launched one year ago, we offered KYC/AML hardware and software but let operators choose their own compliance strategy. Some decided to disable compliance altogether.
We hoped operators would always get to choose KYC vs Non-KYC, but legal requirements have emerged that do not allow the choice. It has become clear that as a registered money service business (MSB), Robocoin cannot support non-KYC machines anywhere in the market. Under our lawyers’ advice, we cannot process anonymous financial transactions. Our operators must comply with know your source and know your destination requirements. Disabling KYC and allowing anonymous transactions create money laundering risks. We cannot violate the law or risk the long term viability of Robocoin and our global Robocoin Operator network.
In the year since launching, Bitcoin and the Bitcoin ATM industry have matured. As the legal landscape becomes clearer, Robocoin evolves and so do the requirements with which we must comply.
The urgency of KYC compliance is continuing to become more clear. First, competitors’ non-KYC machines started dissapearing. Another competitor’s non-KYC Bitcoin ATM got seized in a drug bust. Robocoin remains one of Bitcoin’s leaders in AML / KYC compliance and thankfully our entire network has avoided removal or seizure. Still, events like this represent legitimate warnings. Now, beyond these warning signs, our legal council is warning that FinCen is going to begin making examples out of non-compliant Bitcoin companies.
With Robocoin 2.0, we’re requiring KYC compliance and removing outside dependencies including wallet uptime, exchange uptime, paper redemption tickets, mobile wallet unreliability, lost paper wallets, and others. Robocoin 2.0 is our vision for solving these problems and the Bitcoin industry’s early impressions have been positive (watch reactions from our Robocoin 2.0 debut: part 1 and part 2). At the same time, we’ve loosened where possible, including deprecating the palm vein scanner and speeding up first time enrollment.
For operators unwilling to sacrifice anonymity in favor of compliance, we’re offering to resell their machines. Our legal compliance is paramount to our continued legal operation, and we cannot risk the future of the company to allow anonymity. We remain committed to delivering industry-leading AML/KYC technology and helping proliferate Bitcoin legally.