F2Pool Co-founder Wang Chun: KYC is Feudalism
F2Pool co-founder Wang Chun criticized the "Know Your Customer" (KYC) system on the X platform, stating that KYC not only means "Kill Your Customers" but also attempts to bind people to the land like a feudal system.
Wang believes that people should have the right to freely migrate and stay in different hotels, while the current KYC system requires everyone to provide a "permanent address," which is essentially a discriminatory policy against freely moving populations.
The post also referenced a previous viewpoint by Erik Voorhees, founder of the crypto wallet and trading platform ShapeShift, who stated that the KYC system continuously exposes innocent users to risks.
F2Pool is one of the oldest and largest Bitcoin mining pools globally, providing mining revenue settlement services for miners; ShapeShift was one of the early platforms in the crypto industry to attempt a shift from a mandatory KYC model to a "no KYC" trading model, with Erik Voorhees being a long-time representative opposing mandatory identity verification in the crypto industry.
From a market mechanism perspective, the core function of the KYC system is to help licensed entities like exchanges and custodians meet anti-money laundering (AML) and sanction compliance requirements, but its operational costs (identity verification, address proof, ongoing monitoring) ultimately get passed on to ordinary users, creating additional friction for those who are homeless or frequently cross borders. This is the core issue repeatedly criticized by Wang Chun and industry figures like Voorhees; the ongoing criticism reflects a structural tension between exchanges/mining pool operators and end users regarding who bears the compliance costs. Who benefits: users who can meet KYC requirements at lower costs and have stable addresses and identity documents, as well as large licensed exchanges that leverage compliance barriers to solidify their market position; who is under pressure: digital nomads, homeless freelancers, and users from certain developing regions, whose access to compliant financial services is relatively higher due to KYC requirements. This group is also more inclined to turn to alternative financial infrastructures like non-custodial wallets and decentralized trading protocols that do not require KYC.
Source: Public Information
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Wang Chun, along with partner Shen Yu, co-founded F2Pool in 2013, making it one of the earliest large mining pool operators in Bitcoin mining history, consistently ranking among the top in global Bitcoin hash rate share. He has been active in public discussions within the crypto industry, frequently commenting on issues such as mining regulation and exchange compliance costs. His criticism of the KYC system continues his focus on the phenomenon of excessive compliance costs being passed on to end users.
From the perspective of industry resource investment, exchanges and custodians have been increasing their investments in KYC/AML compliance systems (identity verification service providers, address proof verification, ongoing transaction monitoring systems) in recent years, and these costs are ultimately passed on to users through fees or service thresholds. The criticisms from Wang Chun and industry voices like Erik Voorhees essentially advocate for greater user recognition and funding flow into the "non-custodial, no KYC" niche (such as decentralized exchanges, non-custodial wallets, peer-to-peer trading platforms), which objectively aligns with the interests of industries like mining that rely more on decentralized infrastructure.
Similar historical precedents of "compliance cost transfer causing internal backlash" include the early establishment of KYC/anti-money laundering compliance systems in traditional banking, where widespread criticism arose regarding "de-risking" leading to the exclusion of homeless populations, refugees, and small merchants from the financial system. ShapeShift itself was forced to shift from a "no KYC" model to a mandatory KYC model due to regulatory pressure around 2018, and has since gradually attempted to restore more lenient identity verification options. This path reflects the industry's ongoing adjustments between compliance pressure and user experience. The current stage of the crypto industry is one of continuous digestion and reflection on the applicability of traditional financial KYC frameworks applied to the digital asset space.
This essentially represents the structural friction arising from the implementation of "regulatory changes": the KYC system was initially designed for traditional banking systems, based on the assumption that users have fixed addresses, stable identity documents, and local bank account relationships. However, the structure of crypto assets and their potential user groups (including digital nomads, cross-border workers, and the homeless) mismatches this assumption. Mechanistically, regulatory agencies tend to apply the same KYC standards indiscriminately to emerging financial infrastructures because reusing existing compliance frameworks incurs the lowest costs, but this also results in what should be inclusive and borderless crypto financial tools setting additional barriers for specific populations in practical operations. This is the structural root of the ongoing criticism of KYC's "institutional exclusion" effect by industry figures.
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- The cost of compliance is ultimately passed on to those with the least voice.
- Without a fixed address, there is no financial identity.
- Where the threshold is set, money flows to the other side of the threshold.