I recently found out about this service, called "Don't KYC" that has its own cryptocurrency promises to provide customers with cryptocurrency Visa/Mastercard debit cards (i.e. charge your card with a cryptocurrency, then spend the fiat equivalent to that via the Visa/Mastercard network).
Not really a groundbreaking idea, except that this offering claims to not do Know Your Customer (KYC) procedures. From a privacy perspective, this would be a very sought after option, if one considers the high likelihood of data breaches, especially if one uses such a card only for small purchases or at shady vendors.
My question is: With all the regulations (and I'm sure there are a lot) surrounding access of companies to the Visa/Mastercard network, how is it possible for a company to avoid KYC checks? Can such an offering even be legit? Either they are
- using some really clever workaround (if yes, which one)
- using a loophole in the law (if yes, which one; so that I can assess the risk of it being closed soon)
- a scam.
EDIT I had a look at recently updated their ecosystem and tokenomics. It seems they have some ideas going on, so if they are a scam, they're not a overt. From my understanding, they seem to want to become the "Visa/Mastercard of crypto" in the sense of offering anonymous card and giving merchants POS systems so that you can pay with a crypto-loaded card easily and directly, like you would do with a Visa card. At least this would explain how they can be KYC-less; I'll also update my title to reflect this accordingly.
But this raises the question whether it's legal for merchants to accept crypto POS system where people can pay with crypto card, or NFC-based apps from their phone? At the same time, this idea does not sound thaaat revolutionary; more interesting in this regard are their tokenomics, which sound interesting (make the coin deflationary as more people transact), but experience seems to show that this can blow up in peoples faces if not done properly. Hopefully they have implemented it carefully.