New Zero-KYC Proposal to Secure P2P Crypto Transactions

September 03, 2024 11:15 PM AEST | By Team Kalkine Media

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New Zero-KYC Proposal to Secure P2P Crypto Transactions — Image source: Shutterstock

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A Reddit user known as ShadowOfHarbringer has proposed a new framework called the “Zero-KYC Assurance Mechanism for Fiduciary Money Transfer” (ZKAM-FMT) aimed at mitigating man-in-the-middle (MitM) scams in peer-to-peer (P2P) {cryptocurrency} markets. The proposal seeks to enhance transaction security while bypassing traditional Know Your Customer (KYC) requirements, which some users find intrusive and burdensome.

MitM scams typically involve a fraudster intercepting a transaction between two legitimate parties. The scammer tricks a buyer into transferring funds to a fraudulent account, which is then used to deceive the seller into releasing the goods or services, leaving both the buyer and seller at a loss.

The ZKAM-FMT proposal introduces an integrated browser within P2P market applications. This browser would verify transaction details such as the amount, transfer title, and account number, without requiring the storage of sensitive user data or interfacing directly with banking systems. This approach aims to ensure proper handling of funds and address privacy concerns.

However, the proposal does face potential challenges. Integration with banking websites could be complex due to the need for compatibility with evolving banking platforms. Additionally, a noted drawback is the possible exclusion of younger users who might prefer not to use traditional banking websites, as indicated by the Reddit user.

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