Swan Bitcoin: A Front-end for a "Altcoin" Company?
438 sats \ 8 comments \ @timechain 15 Oct 2022 bitcoin
Although they promote self custody, Swan Bitcoin (as well as Strike) seems to use PrimeTrust to custody your Bitcoin. PrimeTrust seems to be heavy-handed with flagging suspicious behavior and also custodies ETH, LTC and USDT and USDC. A user made a donation to an open source project and had BOTH his Strike and Swan accounts frozen.
While understanding they are a KYC-compliant exchange, I feel that many chose Swan for being Bitcoin only.
Here is the conversation: https://twitter.com/x218935/status/1580928350717349889?t=IdvR3sVKdS_7ov0wZm7BqA&s=19
Any thoughts?
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83 sats \ 1 reply \ @newnym 15 Oct 2022
My understanding is that PrimeTrust simply provides companies such as Swan with services they need in order to comply with KYC. That said, I too found it a bit strange for that guy to be flagged for simply donating to a FOSS project.
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0 sats \ 0 replies \ @timechain OP 15 Oct 2022
You know, AI does it. Perhaps someone else donated some bad coins to that address. Getting your account frozen does not mean you broke a law. Think of a credit card not working if you spend much more than usual or travel somewhere out of the ordinary. It's like they would rather stop 5 'false alarms' than let 1 'bad guy' use their product successfully.
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21 sats \ 0 replies \ @shyfire 15 Oct 2022
This is why we coinjoin. In fact, Swan recommend that you coinjoin in their official best practices guide.
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21 sats \ 2 replies \ @l0k1 15 Oct 2022
Evil people always strive to dirty everyone so as to seem like evilness is "normal".
Swan would have to go outside USA to avoid USA KYC regs. This would greatly reduce their market.
There is no question that this taint has a tendency to spread.
And yet people need to make a living, as well.
If you want clean you need to go Bisq and darkweb. Ironic, but that's how it is.
It's the system that is corrupted. If you want to pay via SWIFT or SEPA you are suffering compromises, implicitly.
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69 sats \ 1 reply \ @timechain OP 15 Oct 2022
Yeah, i didn't expect them to not be doing KYC, I just assumed they just blocked coins from addresses on the OFAC list, instead of going above and beyond what the law asks, using sophisticated AI chainanalysis. When a big company goes above and beyond, its usually coupled with asking the government to regulate harder, creating an expensive regulatory moat that keeps out newer, smaller companies.
Also many people use Swan to not give money to altcoin products.
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0 sats \ 0 replies \ @l0k1 15 Oct 2022
Yeah, Cory's gonna have to make new arrangements for sure.
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0 sats \ 0 replies \ @takaponka 15 Oct 2022
And here we are. This is just the beginning, prime trust will have central role in gov compliance I think. Strike and swan hipocrisy started to be called out finally.
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0 sats \ 0 replies \ @TheBTCManual 15 Oct 2022
Spin up a node, and set up a joinmarket and push your sats through there, alternatively, if you don't want to support KYC exchagnes, use a p2p exchange and pay the 15-45% premium above market in these illiquid markets
Its all up to you
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