ZachXBT declares KYC useless: "It's a gift to hackers, not protection"
Prominent on-chain detective ZachXBT has sharply criticized the practice of KYC (identity verification) in the crypto industry, calling it one of the most useless types of data for investigations. Moreover, he stated that this topic radicalizes him to the point where he is ready to start publishing methods for bypassing excessive control.
According to ZachXBT, KYC benefits only malicious actors. When a company is hacked and its management faces no legal liability for the theft of user funds, the collected data becomes easy prey for hackers. The detective posed a rhetorical question: why does the state effectively force people to pay $100 on the black market for access to basic privacy?
"Slippery Slope": From Child Protection to Total Surveillance
This statement was a response to a post by ShapeShift founder Erik Voorhees, who warned that KYC might soon be required even for using a computer. Voorhees emphasized the danger of spreading mandatory identification on the internet.
Matthew Green, a cryptography professor at Johns Hopkins University, also joined the discussion. He pointed out a troubling trend: age verification is increasingly becoming part of every new regulatory proposal. Essentially, Green emphasizes, it's not about age but about identity verification. Under the pretext of protecting minors, an infrastructure is being built that ultimately ties a person's real name to their online actions.
How Privacy Technologies Are Turned into Surveillance
Green described a step-by-step scenario for deploying such a system. First, age verification would be introduced for accessing some content, with some systems using privacy-preserving technologies. Then the question arises: under what conditions will law enforcement be able to access the collected data, and how will an anonymous action on a website turn into a real name?
In his assessment, this would require "fine-tuning" privacy technologies so that they store the user's true identity in a depository with each website visit. Access to this data would first be opened by warrant, then by request, and eventually integrated into mass scanning systems. Green stressed that the stated goals—combating grooming and child sexual abuse material—would not be achieved, as these metrics have never decreased due to such measures.
Cryptalist's Opinion: The statements by ZachXBT and Matthew Green are not just an emotional reaction but a clear indication of a fundamental conflict between regulatory pressure and the architecture of privacy in cryptocurrencies. KYC in its current form is indeed a "paper tiger" that creates enormous risks for users during hacks and does virtually nothing to combat real crimes, which easily bypass centralized data collection points. The market is increasingly moving toward solutions based on zero-knowledge proofs and decentralized identity, and this is likely the future, not the outdated KYC model.