Can KYC and Permissionless Money Co-exist? Not According to This Crypto Influencer

cryptonews.com:

In light of the recent arrest of the founders of Tornado Cash, a decentralized private payments protocol built on top of the Ethereum network that severs the link between sending and receiving wallets, some are questioning whether Know Your Customer (KYC) laws and permissionless money can co-exist.

“Does bitcoins lightning network help facilitate untraceable anonymous financial transactions?... does Meta Mask do KYC?”, asked crypto influencer CryptoTea on Twitter.

“What's stopping the cops from arresting the developers of meta mask and lightning labs?” she continued, adding that it is her understanding “that KYC laws and permissionless money can NOT coexist”.

According to an explainer on Kraken, most micropayments made using the Lightning Network, a layer-2 payments protocol built on top of the Bitcoin blockchain, will be “nearly untraceable”.

Meanwhile, users can set up a wallet using wallet service providers such as MetaMask without submitting any personal information, as is required when setting up accounts on platforms bound by KYC requirements.

The US government banned its citizens from interacting with Tornado Cash last year and has since been arresting its founders, claiming that they and the protocol knowingly facilitated money billions worth of money laundering, including for North Korean hacking group Lazarus Group.

Crypto community members have been highly critical of the crackdown, with some likening it to the US government arresting the inventor of the curtain, because curtains might obscure illegal behavior from an outsiders view, or to arresting the inventor of a hammer, because someone else might use that hammer to do harm. 

The central ethos that motivated the creator/creators of Bitcoin was the idea that they