(Speculation alert)
It seems to me they serve a higher level purpose of squeezing the middle class and the "small rich" (sorry, lack a better expression) out of their wealth.
All this BS anti-ML, KYC, etc do is make this audience's lives harder and more expensive to invest and diversify their risks.
Meanwhile, the "big rich" (again, sorry) can navigate these ridiculous bureaucracies easily, as the fixed costs are comparatively small to them.
Criminals also can navigate this easy as a piece of cake.
Or do they imagine that a person who committed dark crimes will stop and think: "Oh nooo, I have to send my real passport photo? Damn, busted!"
I take my paycheck, and I invest it into the SP500. My investment costs are minimal, and my investment gains are correlated with the overall health of capitalism.
In what way does KYC or AML affect me? I'm not looking for theoretical tangents, I'm looking for tangible negative impact.
I understand that there are criminals cheating the system, by doing something illegal, and then working around those restrictions. But how do these restrictions place an onerous burden on me? Showing ID to open a bank account is not an onerous burden that keeps me poor.
It will waste your time when you want to do anything like borrow especially for a mortgage, or anything slightly more complex when you get some bright idea like trying to transfer the stock shares directly instead of selling them first. It will waste your time when want to invest in other things like a private equity fund or directly into someone else's company. It will waste your time if you try to create more advanced retirement accounts and then invest with those.
It will definitely waste your time when the fintech middleware company that made signing up to a bank easier with some super streamlined online identity verification software doesn't recognize you. "I swear I really didn't live on any of those street addresses, wtf this was supposed to take 5 seconds".
> It will waste your time when you want to do anything like borrow especially for a mortgage,
The Augean amount of random bullshit you have to shovel when buying a home absolutely dwarfs the KYC compliance component of it. It's not a meaningful impediment to owning property.
> trying to transfer the stock shares directly instead of selling them first.
Transfer from where to where? One brokerage to another? What gain is there for me in doing that? Could you quantify roughly how much money I'm leaving on the table from not doing this? Where would this money come from?
> It will waste your time when want to invest in other things like a private equity fund or directly into someone else's company.
If I wanted to do that (Can't say that I do), and even if AML/KYC weren't a concern, accredited investor requirements (which I meet, FYI) would require me to jump through the exact same hoops to do that.
You're not making a convincing case for how AML/KYC is materially harming me. It's just one of a million procedural checkboxes that my counterparties ask me to meet, in order to lend me money, or take my money.
I've wasted an order of magnitude more of my life on hold with Comcast, than I have on this. If there's a vast conspiracy to keep me poor, AML/KYC is doing a piss-poor job of it.
I'm not the person you originally replied to. Their speculation is conflating a couple things.
Try doing something abroad, like starting a business elsewhere, opening a bank account, investing abroad, and tell us how it goes.
when thats all incorrect. from the investor/customer and low-level banker's perspective, it is impossible to distinguish between the actual law, their private company's interpretation of that law, strictly separate company policy, their implementation of that combination of things, the flaws or merits of that implementation, the flaws and merits of the law.
In this case, the person asking you actually doesn't care at all. Your role is to simple not say the bad word. A word you don't know. So you can always say pretty much anything, as long as its not "I'm on the OFAC list and I'm circumventing sanctions moving money from my heroin business".
A US citizen, for example, would never have any restriction banking in the US due to prior conduct (unless you pissed off that sector due to a history of overdrafts, bounced checks, see chexsystems). Al Capone would always be able to open a bank account or brokerage account or buy property. The Patriot Act would have never flagged the Saudi terrorist wire transfers despite being passed under the guise of flagging that kind of thing. AML/KYC is just a data mining operation masqueraded as preventing ... something. Something thats not terribly expensive, especially when compared to the amount of money that isn't flagged. Turns out people just don't want to blow up planes and buildings. The only people convicted of violating capital controls are the poorest of the proletariat that has some ambiguous and wrong understanding about "moving $10,000", and gets thrown in prison for attempting to circumvent it simply because the law against circumventing the threshold is on the books, whether the threshold would have applied to how the money was moved or not!
The entire thing is a ridiculous waste of taxpayer and public sector resources, and private sector compliance costs are probably overhanging a full digit % of the GDP growth.
Its successfully stigmatized the concept of having money, from the very population that needs and strives to have it the most! While everyone that can afford education or legal help or a dynasty of passed on knowledge is operating with complete freedom.
It's estimated that, worldwide, KYC/AML bring in only an insignifant 1/150th of the enormous compliance cost it puts on the private sector. More than two freaking orders of magnitude.
It's, indeed, a complete total and utter waste.
Not to mention that some things that used be "sacred" do not exist anymore: for example in Belgium (and in other countries I'm sure), lawyers now are forced, in many cases, to denounce potential clients that come to asks for their help.
This is beyond insanity. I do believe that even bad guys should have a right to see a lawyer without fearing that the lawyer is actually a little snitch.
I bought property recently in another (less expensive) place and they ask about where you work and so on but say I just have money saved up they really have nothing to check. Say im retired can i not buy something now? No that would be pretty stupid. Journalists these days are beyond stupid.