[Penny Crossman, editor in chief of the American Banker wrote a thought-provoking piece in the Banker on the handling of Bitcoin transactions by banks and bank regulators. I believe you will find the article interesting, which includes a quote from Bill Isaac.]
The long-running tension between anti-money-laundering rules and data privacy concerns is especially pronounced in the awkward relationship between regulated financial institutions and digital currency businesses.
A few fintech startups, such as Chainalysis and IdentityMind Global, have cropped up to help banks comply with know-your-customer and AML rules as they consider providing banking services to bitcoin-related businesses. The startups analyze bitcoin transactions for patterns and anomalies that might indicate criminal behavior.
The very existence of these startups raises questions about whether bitcoin users’ privacy can be protected as banks try to comply with regulations that require them to understand their customers.
Anonymity, or more precisely pseudonymity, has always been a key feature of bitcoin. People and businesses (not all of them criminals) who don’t want banks or the government to see their monetary transactions turn to bitcoin.
Here is the link to the full article