# a16z Authors Say U.S. Law Can Accommodate Reusable KYC

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/45557
Published: 2026-10-31T15:52:12.000Z
Updated: 2026-10-31T15:52:12.000Z
Section: Regulation

> Maggie Hsu and Michele Korver propose signed credentials customers could present across services, while banks would remain responsible for meeting their own identity-verification requirements.

Andreessen Horowitz (a16z) authors say U.S. law can accommodate reusable identity checks for onchain finance, a model they say could reduce repeated verification while keeping compliance duties with banks.

Maggie Hsu, a16z’s head of go-to-market, and Michele Korver, its head of regulatory, set out the proposal in an Oct. 12 essay. They describe reusable know-your-customer (KYC) checks in which a provider verifies a customer and issues a digitally signed credential for use with other applications. A zero-knowledge proof could confirm a requested detail without revealing the full identity file. The authors also discuss credentials linked to wallets and compliance controls built into token contracts. “Institutions do not want to avoid KYC; they want to avoid redundant KYC,” Hsu and Korver wrote.

Current bank rules do not make one institution’s identity check automatically valid at every other service. A bank’s customer identification program (CIP) must use risk-based procedures that enable it to form a reasonable belief that it knows each customer’s true identity. A bank may rely on another financial institution’s CIP only when the reliance is reasonable, the other institution is regulated by a federal functional regulator and subject to an anti-money laundering program rule, and a contract requires annual certification that the institution has implemented its AML program and will carry out specified CIP requirements. The relying bank remains responsible for its other Bank Secrecy Act obligations.

The Financial Crimes Enforcement Network (FinCEN) and federal banking agencies clarified Sept. 8 how digital credentials may fit into a bank or credit union’s CIP. Institutions may consider unexpired government-issued credentials, including state mobile driver’s licenses, if they satisfy the institution’s own requirements. Third-party electronic credentials may also be used as a non-documentary verification method when the CIP permits it. The receiving bank or credit union must ensure the provider uses the same level of authentication the institution would use itself.

That guidance does not establish a credential that every onchain service must accept. Each institution still has to meet its own CIP requirements. A related example is the GENIUS Act’s rules for payment stablecoin issuers, which treat permitted issuers as financial institutions under the Bank Secrecy Act and require anti-money laundering and customer-identification programs, including verification of issuer account holders.

FinCEN’s April 10 proposed rule for anti-money laundering and countering the financing of terrorism (AML/CFT) programs lists digital identity and blockchain monitoring and analytics as possible compliance tools. The proposal says responsible experimentation with technology alone would not raise the risk of significant supervisory or enforcement action under the rule. The rulemaking remains proposed; its comment period ended June 9, 2026.

Hsu and Korver argue that existing law can support reusable checks without new legislation, but that is their interpretation rather than a regulatory determination. Their essay also notes that a nontransferable token by itself cannot prove that the current wallet controller is the person whose identity was checked; expiration, revocation and wallet-control checks depend on implementation.