On-chain investigator ZachXBT has sharply criticized Know Your Customer, or KYC, practices in the crypto industry, calling them one of the least useful types of data for investigations. He said the issue could push him so far that he may start publishing on-chain methods for avoiding excessive surveillance.
According to ZachXBT, KYC often ends up benefiting attackers rather than users, especially when a company is hacked and its management faces no legal liability for the theft of customer funds. He also questioned why governments effectively force people to pay $100 on the black market just to access basic privacy.
Age Verification Controversy
ZachXBT’s comments came in response to a post by ShapeShift founder Erik Voorhees, who warned that KYC could soon be required even to use a computer. Voorhees’ remark reflected growing concerns about the spread of mandatory online identification.
He also shared a post by Matthew Green, a cryptography professor at Johns Hopkins University. Green said age verification is rapidly becoming part of nearly every new regulatory proposal.
According to Green, the issue is not really about age, but about identity. He argues that, under the guise of protecting minors, governments and platforms are building infrastructure that could eventually link a person’s real name to their online activity.
How Privacy Technology Can Turn Into Surveillance
Green described a scenario in which the system could be rolled out in stages. First, age verification would be introduced for access to certain types of content. Early systems would collect identification documents, while some would use privacy-preserving technologies.
Then, Green warned, the next question would be under what conditions law enforcement agencies could access the collected data, and how anonymous website activity could be tied back to a real identity. In his view, this would require adjusting privacy technologies so they effectively hold a user’s real identity in escrow every time they visit a site.
Access to that data, according to Green, could initially require a warrant, then become available by request, and eventually be integrated into mass scanning systems. However, the cryptographer argued that the stated goals of fighting grooming and child abuse material would not be achieved, because such measures have not historically reduced those harms.
