Nope, they don't care about that, they need only the first link, the addresses from which the funds entered or to which they went, as user B will have no choice if he wants to use those BTC to try and exchange them where he will have to come to the surface himself.

They need only the recipient of the funds, when you withdraw btc from an exchange to your address you're the recipient of the funds. If you're stupid enough to withdraw to someone's else wallet, acting as a mule, then you deserve it.

As I said before FATF is not an enforcer of the law and it does not have prosecutors, they are interested only in getting the first link in the chain confirmed via KYC, they know all to well that large operations won't be able to weasel out of this, at one point addresses will collude, identities will link to some bank accounts, mistakes will be made with fake identities or reused sim cards, and they are pretty damn good at tracking.

Now on to the certain part of the wallet identification, this is only to custodial wallet services (think Coinbase, for example). They know, even if they wanted to, that if they wanted to verify the identity of non-custodial wallets (sorry to use the term I really just mean standard Bitcoin wallets AS IT SHOULD BE but to provide context!) they couldn't enforce it.

Also, these are interpretive notes, and it will generally be up to the jurisdictions to enforce their own laws compliant with these guidelines.

Trust me, it's not as bad as it sounds - I agree it could be worse than we think of course but we as typical users should not need to worry, just as much as we can still use plenty of money senders and remittance services without that much kyc if we wanted to.

there's surely lots of tax avoidance happening in crypto. the stats from the IRS speak for themselves. if it makes avoiding taxes (by obfuscating ownership of crypto funds) more difficult, of course people are gonna complain about it.

even if your activities are 100% legit, this sounds horrible for privacy and data protection. this will require massive data sharing among exchanges about their users. and the fact is, $1000 is an insanely low threshold. $10000 is the threshold that banks use for currency transaction reporting. why the hell are crypto users being targeted for reporting for 10x smaller transactions? this doesn't seem like equal treatment.


because the exchanges will start asking for metaphorical blood samples just to do business with them. it's not just simple KYC anymore. they will require increasingly invasive information---where your money comes from, where your money is going, KYC information on the recipient of any aggregate payments totaling $1000..... why should we put up with this? my bank doesn't require this information for payments this small!

hopefully this will prompt a move back to p2p trading. let's make p2p cash trading great again!