Bitcoin, Crypto currency, Blockchain

Decentralized or not? IDEX justifies KYC and AML

The – more or less – decentralized Ethereum exchange IDEX wants to continue to Know Know Your Customer (- your(n)-customer, KYC) and Anti-Money-Laundering (Anti-money laundering, AML) directives will introduce. The cuts, however, something to do with the business model, to be a decentralized exchange for trading crypto-currencies. This circumstance explains the company in a blog post.

The Calls for a decentralized Bitcoin exchanges were in last year, might be louder than. Attacks on the technical infrastructure, unfair trading methods amongst employees, and again and again, allegations of manipulation: like So be sure Kryptwowährungen like Bitcoin, also, the stock exchanges, are traded on which you are not this often. So it’s no wonder that the Community is demanding increasingly decentralized exchanges. So such, which is a Central point of attack (single point of failure) is missing, as well as a Central administration. The Ethereum-based exchange-IDEX does not represent such an attempt, quite decentralized, but it is still.

Like on 25. October it became known, began to IDEX in order to block the IP-addresses of New York customers. According to information from the operators of the stock exchange want to prevent to violate the provisions of the Federal state. To hedge even better in the future, announced IDEX in a blog post now, in the future, in addition to AML and KYC guidelines.

IDEX: What is decentralized?

The allegation cushion, IDEX is decentralized, refers to the stock exchange on the concept of “pragmatic decentralisation”. Accordingly, it is the best opportunity for the stock market, the decentralisation approach, while customer satisfaction, the following guidelines must be observed:

  • Without guardianship: The stock market has no own Funds
  • Censorship resistance: no single Person or individual has the possibility of Exchange off or the other can prevent to use them
  • Transparent: Open Source and verifiable Code
  • Auditable: All Trades will be written to the Blockchain and are kept forever

It is therefore the combination of the Blockchain features in the handling of transactions and the traditional characteristics of stock exchanges, to order books and Trades. Through this hybrid form of decentralized Features, and centralized guidelines, it is possible to obtain the necessary liquidity on exchanges.

Driftige reasons for gradual centralization

Likewise, whether it be for a full degree of decentralisation is necessary, all of the order books on-chain, so on the Blockchain, which cost is currently too much capacity and, above all, time. Furthermore, the need for an access point in the Form of a website is essential for the Functioning of the Ethereum-based exchange. Also, the customer support would be lost in the event of a complete decentralisation, finally, you can request for transactions with no fees, which would be to the detriment of the User. To protect the last key point: customers, offer their products, must comply with the stock exchanges, at any time, regulatory rules, what is currently conceivable shape without a certain degree of centralization is possible.

“[…] ultimately, all customers will benefit.”

In this sense, the company also decided that the KYC and AML guidelines. This, like other Bitcoin exchanges, in each case in relation to the traded amounts of money: Who wants to move greater amounts, must identify themselves accordingly better. Ultimately, benefited, IDEX in the blog post, all of the current Changes:

“These Changes will bring many benefits to a short period of time. We hear again and again of the great crypto-Funds, de their Trades via IDEX can handle, but due to the lack of KYC guidelines. The upcoming Changes will allow you to participate in a more liquid market and, ultimately, all customers will benefit.”

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