We have 4 days to contest KYC being required by internet services

Original Article ↗ Hacker News Discussion ↗

A proposed U.S. rule would require cloud and other infrastructure-as-a-service providers to verify the identities of foreign customers, framed as a way to curb sanctioned or malicious actors using American compute — especially for AI training and cyberattacks. Critics argue the definition of IaaS is so broad it could effectively end anonymous hosting and push providers toward universal KYC, creating large privacy risks, chilling speech, and expanding mass surveillance while doing little to stop serious criminals. Others highlight practical concerns: high compliance costs, data-breach exposure, unclear constitutional footing, and the likelihood that determined bad actors will route around U.S. infrastructure entirely.

Scope and Intent of the Rule

  • Proposal targets U.S. “Infrastructure as a Service” (IaaS) providers and foreign users, derived from EOs 13984 and 14110.
  • Official goals: prevent sanctioned/malicious foreign actors from using U.S. cloud/AI compute for cyber attacks or large‑scale AI training.
  • Dispute over scope: some read it as limited to foreign high‑end AI usage; others note the draft text appears to cover all IaaS accounts, with extra obligations for foreign persons and AI training.

What Counts as IaaS

  • Clear inclusions: virtual private servers, dedicated/bare‑metal servers, cloud VMs (AWS, Azure, etc.).
  • Debate whether ISPs or VPNs fit the definition; some say “no” based on the “run non‑predefined software” clause, others say the wording is broad enough that regulators could later stretch it.
  • Many argue most generic web hosts where you can run your own code (e.g., self‑hosted WordPress, Mastodon) are in scope.

Arguments in Favor

  • Helps enforce sanctions and OFAC rules; harder for foreign attackers to anonymously rent U.S. infrastructure or GPUs.
  • Seen as analogous to banking KYC: a reasonable tradeoff to curb cybercrime, CSAM hosting, scams, and hostile AI efforts.
  • Some accept KYC as already de facto via credit cards and see this as formalizing existing practice.

Arguments Against

  • Strong concern it functionally ends anonymity for self‑hosting: any blog, chat server, or node on U.S. IaaS would require ID, enabling identification of dissidents.
  • Slippery‑slope fear: starts with “foreign AI misuse” and gradually expands to domestic users and other services.
  • Privacy and security: more mandatory ID collection means more data breaches, identity theft, and potential government mass surveillance.
  • Accessibility: blind users and others may be locked out by ID‑upload workflows.
  • Economic/competition risk: foreign customers may leave U.S. clouds for non‑U.S. providers; compliance costs favor large incumbents.

Legal and Effectiveness Debates

  • Some see a 4th Amendment problem (generalized, suspicionless identification), and an attack on anonymous speech; others argue existing precedents on bank recordkeeping suggest it will survive challenge.
  • Several note AML/KYC regimes in finance appear empirically poor at stopping crime but very effective at burdening ordinary users.

Process and Activism

  • Commenters highlight that this is a rulemaking with a formal comment period; effective comments should focus on scope, legal issues, costs, and unintended consequences rather than simple dislike.