Payment protocol company Ripple Labs recently announced an additional step that would require users to submit their personal information to use Ripple network.
In an email sent to its customers last week, the Californian startup said it wanted to bring additional verification procedures for users in order to comply with the ongoing regulatory sketching. “An ecosystem that supports regulatory compliance builds confidence and encourages new participants to use Ripple and contribute volume to the network,” the letter said.
Most reactions to Ripple Labs’s announcement were vehement. While some believed that the company could have been better if it was headquartered in some other nation, others simply referred it as an opportunistic lobbying too hard to get inside the “legal” circle. But perhaps the most notable comment came from Coinapult co-founder Erik Voorhees who right away called Ripple Labs a “financial technology controlled by only one company”, thereby declaring itself as some sort of bank.
Nevertheless, it would be important to notice that the whole idea of complying-with-the-regulators is not new. Think of the Bitcoin companies trying to enter the Wall Street space, seeking public listings, licenses and dozens of other stuff to declare themselves a properly regulated entities. Like Ripple Labs, even they would be required to seek users’ personal data for usual verifications. The KYC course seems very normal if looked from the eye of the law, even though when it rubbishes the very principle on which Bitcoin was created on.
The news might still come as a surprise to those Ripple fans who, until the announcement, were expecting revolutionary blockchain based decentralized services out of it. The dilemma seems to have ended now, for it has proved itself to be innovative, but the same-old centralized platform like PayPal where users have no control of the network.