The objective of a KYC process is to create data that will prevent banks from being used, intentionally or unintentionally, by criminal elements for money laundering activities. Crypto and KYC have had a entangled relationship since the earliest days of BTC and Mt. Gox, but as crypto has become a widely known and legitimate financial instrument, society’s interest in managing it as such has grown as well.

All legitimate and long-lasting cryptocurrencies of Tezos’ cohort (2017 — present) either have gone or will go through KYC. The stakes are just too great for the market participants to ignore this process. Perhaps this will change someday in the future when a different distributed society governance model exists, but Tezos lives now in a world of pragmatism that makes KYC a requirement for launch.

The KYC process is designed to associate a real person with the underlying assets that they control. By submitting an official ID, proof that you control that ID, and tying that to an XTZ wallet, you are providing evidence that is necessary to support the flow of value through the blended crypto / fiat exchange and banking systems that we live with.

The Tezos KYC process should not come as a surprise to anyone in the crypto community. There has been significant chatter about this possibility on both the Tezos Riot and Reddit channels for weeks. The Tezos Foundation has recently announced a firm launch timeframe for the beta network and related access to tradable XTZ. And recently TF released an XTZ allocation process asking all contributors to verify their contributions in the proposed genesis block.

Outside of Tezos, the requirements for KYC are evident as well with various regulatory agencies around the world increasing their oversight, and similar scale projects going through the KYC process themselves.

With the announcement of KYC, there has been a good degree of uncertainty around why Tezos is taking this step, and whether any group of contributors would be “black listed”, such as unaccredited US contributors. The good news is that there is no evidence that such groups will not be able to fully participate. Contributors from many different countries and circumstances have already completed the KYC process, and we are not aware of any group being singled out.

While I believe that the Tezos Foundation could have done a much better job communicating and explaining the KYC requirement prior to it’s launch, I am comforted that TCF Operations Director Samuel Harrison is working in Paris this month on supporting the needs of the community through this process and onto launch, and also that Tezos Foundation board chair Ryan Jesperson found his way onto the Tezos Riot today to comment on his awareness of the community’s concerns and the efforts they are taking.

From my perspective, there are at least two major reasons why you should support the KYC process for Tezos in particular:

All legitimate, large, centralized exchanges that do business in regulatorily active countries will require new listings to have gone through a KYC process for trading on their exchanges. Many in the Tezos community look toward Coinbase as the holy grail of exchanges. Coinbase has been aggressively pursuing alignment with US and international regulators and it is obvious that Tezos KYC will be a necessary step in any potential listing with them. The Tezos Foundation holds hundreds of millions of dollars worth of BTC,ETH and ETC. These original crypto funds donated to the Tezos Foundation need to be exchanged for fiat, and the banks that provide banking services for TF require KYC on those funds. Soon TF will also hold billions in XTZ. Conversion of any of these to fiat will likely also require KYC from the bankers’ perspectives.

The announcement of KYC means that launch is just around the corner. Whether you came to the project in 2018, 2017 or even earlier, the day that we have all been working towards is within sight! This week you should grab your ID, get your XTZ’s KYC’d, and then go and celebrate with a taco or two. Lunch is coming!