Fifty state AGs tell the FCC its KYC baseline is too thin

Fifty state and territory attorneys general filed joint comments in the FCC’s KYC Further Notice in late July, and Kelley Drye’s Paul Singer, Beth Bolen Chun and Jennifer Rodden Wainwright have the summary. The FNPRM proposed originating providers collect a customer’s name, physical address, government-issued ID number and alternate phone number. The AGs call that insufficient and ask for business formation and ownership records, taxpayer ID numbers, articles of incorporation, good standing certificates, DBA lists, verified email domains, and the identity of owners holding 10% or more — including indirect owners. On top of that: consent procedures, sample call scripts, and any prior enforcement actions or terminations by other providers.

They also ask for annual re-verification at minimum, more often on red flags or changes in traffic patterns, and they reject a small-provider exemption outright — illegal traffic “has often been facilitated by smaller providers,” and an exemption would make them “more attractive to bad actors seeking a less rigorous entry ramp for illegal traffic.” The red-flag list is operational: registered agents and virtual offices as physical addresses, residential addresses on corporate registrations, no commercial web presence, newly created email domains, non-registration in the state claimed, and payment in cryptocurrency.

The detail Kelley Drye leaves unnamed is the interesting one. Throughout the comments the AGs point to one company’s public-facing KYC protocols as “model standards” and “a reasonable starting place for this discussion.” Fifty attorneys general asking the Commission to build a federal rule on a single vendor’s published procedure is worth knowing the name behind. Separately, the AGs flag MVNOs and bulk SIM purchase and activation as a distinct problem for a later proceeding — the same gap that shows up on the identity-verification side. Reply comments close September 8; the Regulatory Watch dispatches carry the filing-by-filing detail.