Hoskinson Argues with Twitterati Over KYC-Decentralization Issue
- A Web3 leader believes KYC cannot exist at L1 while remaining an open permissionless system.
- Last week, Charles Hoskinson took sides with the US regulator regarding ETH staking.
Early today, Charles Hoskinson, the founder of the Cardano network, took part in the controversial discussion regarding adding a know-your-customer (KYC) support for layer one (L1) blockchains.
Calvin Brew, a lead engineer at SundaeSwap Labs, started the conversation by arguing that KYC support on layer one will be necessary for mass adoption even though some users may not fancy the idea.
In response, a Web3 leader, Monad Alexander, expressed his concerns about the potential for a centralized system, stating that KYC cannot exist at the L1 “and still have any hope for an open permissionless system.”
The Cardano founder joined the conversation, telling Alexander to “stop lying to people,” adding that there is no need for a false dichotomy between regulated and unregulated systems. Hoskinson argued that a decentralized protocol would have users who write software for their specific needs, regulated and unregulated.
In another thread, a Cardano enthusiast with the username Ada Whale on Twitter claimed that once KYC becomes available, service providers risk violating sanctions imposed by organizations such as the Office of Foreign Assets Control (OFAC).
Last week, Hoskinson took sides with the US Securities and Exchange Commission (SEC) regarding the regulatory status of proof-of-stake blockchain tokens. In a video on Twitter, Hoskinson expressed that temporarily giving up assets to another party to do some work on a person’s behalf to generate revenue, as in the case of Ethereum, looked like regulated products.