The proposal takes a novel approach to overcome a known limitation of blockchain transactions
A new proposal called the “Zero-KYC Assurance Mechanism for Fiduciary Money Transfer” (ZKAM-FMT) has been introduced by a Reddit user known as ShadowOfHarbringer, aiming to tackle financial scams in peer-to-peer (P2P) cryptocurrency markets. The innovative proposal seeks to secure transactions without relying on the traditional Know Your Customer (KYC) processes, which many users find invasive and burdensome, especially those who prioritize privacy.
The ZKAM-FMT proposal addresses a common scam scenario where a bad actor intercepts a transaction between two legitimate parties. In this type of man-in-the-middle (MitM) scam, the scammer tricks a buyer into sending funds to a seller’s account, only for the seller to unknowingly release the purchased crypto to the scammer. The buyer ends up losing their money, and the seller faces potential legal issues.
To combat this, the ZKAM-FMT suggests integrating a browser within P2P market applications that can verify transaction details such as the amount, transfer title and account number. This system would ensure the accuracy of transactions without storing sensitive user information or interacting directly with bank systems, thereby addressing privacy concerns.
However, implementing the ZKAM-FMT system isn’t without challenges. One significant issue is the need to integrate with banking websites, which could be complicated by the frequent updates and varying interfaces of different banks. Additionally, the proposal notes a potential drawback: the system’s reliance on web browsers may limit its usefulness, particularly for younger users who prefer mobile apps for their transactions.
Despite these challenges, the proposal represents a fresh approach to preventing scams in the cryptocurrency space. By reducing reliance on KYC processes, the ZKAM-FMT could provide a more secure and private way to conduct P2P transactions, though its practical implementation remains to be seen.
