Proposal: Establishing Validator Accountability and KYC Requirements

General
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:puzzle_piece: Proposal: Establishing Validator Accountability and KYC Requirements

Summary

As a super-decentralized blockchain, Terra Classic has always taken pride in having multiple independent sources of information ,allowing the outside community to stay informed through diverse voices and opinions.

However, in recent times, certain elements within the community have begun spreading misinformation, defamation, and baseless accusations towards individuals, projects, and even entire entities operating within the chain and out side as well.
This has reached a concerning level, as some are now making public claims of “fraud” without evidence , statements that can have serious legal and reputational consequences for the entire ecosystem.

Context

Healthy debate and criticism are part of what makes Terra Classic strong , but false narratives and defamation threaten to undo years of work.

Unfortunately, we’ve seen:

  • Misinformation spread publicly by some validators.
  • Defamatory remarks directed at legitimate contributors and teams.
  • False fraud allegations made with the intent of manipulating delegations or harming reputations.

These actions have a real-world effect investors see the chaos and lose confidence, projects hesitate to engage, and our credibility as a serious blockchain network suffers.

The Problem

At present, anyone can run a validator and present themselves online under a pseudonym — often just a social media avatar with no verifiable identity.
While this anonymity was once seen as a strength, it has now become a shield for malicious behavior.

Despite multiple community requests for moderation and responsibility, some individuals continue to engage in these harmful actions with no accountability.

This creates an unsafe and unstable environment, especially when the public cannot distinguish legitimate validators from those spreading falsehoods.

Proposal

To protect the integrity and credibility of Terra Classic, I propose the introduction of a KYC (Know Your Customer) requirement for validators on the active set.

This measure would:

  • Ensure that validators are verified individuals or registered entities, not anonymous avatars.
  • Provide a mechanism for accountability in cases of defamation or fraudulent claims.
  • Allow affected parties to take precautionary or legal actions if necessary.
  • Improve investor confidence by showing that our validator set represents responsible, real operators.

This proposal does not aim to reduce decentralization — rather, it seeks to add integrity and trust to those representing our network publicly.

Implementation Suggestions

  1. Community Discussion Phase

    • Gather validator and community feedback on implementation methods.
    • Define privacy boundaries and data protection standards.

  2. Trusted KYC Partner

    • Reputable, privacy-compliant verification provider or establish a community-appointed verification body.

  3. Phased Rollout

    • Phase 1: Voluntary KYC for validators who wish to publicly confirm their verified status.
    • Phase 2: Mandatory KYC for validators above a set voting power threshold (e.g., top 50 or top 80).

  4. Transparency Registry

    • Maintain a public “KYC Verified” registry to help delegators make informed choices.
    • Non-KYC validators can still operate, but will be marked as “Unverified"( under Phase 1).

Conclusion

Decentralization is about freedom — not freedom from accountability.
To preserve the professionalism, safety, and trust within the Terra Classic ecosystem, it is time to take responsible action.

By introducing KYC for validators, we send a clear message:

Terra Classic is a serious blockchain network — not a playground for misinformation or manipulation.

Let’s work together to ensure that those representing the chain do so with honor, transparency, and accountability.

:speech_balloon: Open for Discussion

This proposal is meant to gather community sentiment and feedback before any formal governance submission.
Please share your thoughts below — whether you support, oppose, or suggest adjustments to the framework.

2 Likes
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Yes, yes, yes, validators should contribute something to the network instead of giving false hope with promises that have no real backing also talking about conspiracy theories (binance recovery plan etc.)

1 Like
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How will phase 2 (mandatory KYC) be enforced by the chain?

This is a very bad idea imo. The idea is that blockchains should be sovereign entities that are free from interference from external authorities. Once there is cache of validator personal information, this becomes a honeypot for regulators/authorities to use as an attack vector.

1 Like
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  1. I’ve seen many attempts at GP lately. I guess this is another one. Trying to fight him will only make him and his base stronger. He has 4% VP but we are giving him 100% attention. Many delegators (even those who dislike GP) actually hold and stake $LUNA believing that there is a secret plan. Yes, it’s ‘dumb money’ but still - they stake and are invested which is good.

  2. I would like to expand on this topic and maybe have a code of conduct for validators where there are ground rules set (e.g. good behavour, active voting, commenting on props during discussion phase, not voting last-minute, not talking crap in voting memo, no double noding, no bad faith behavior (circumventing dyncomm), no vulgarities in validator name etc.) Validating is a privilege and with that should come standards. Depending on the severity of the offence, the other valset could then vote to issue a formal notice to such validator to remedy the breach in 30 days. If not, then another vote to penalize - slash, tombstone etc. I think every society in human history has expelled members of the society for bad behavior. That’s very healthy. Are we any different? Havin such written CoC would mean that any validator in the active set would automatically ‘opt-in’ these rules. When the community criticised JiL for double-noding, he replied saying that he hasn’t breached any rules. So let’s make them!!!

AtomOne has a constitution: AtomOne (ATONE) Governance — Validator Info

  1. Having KYC for validators makes sense. It is insane that a multi-million chain is voted on by anonymous actors who get paid from ORP whilst enjoying anonymity. Imagine your government voting on laws, but you don’t know who these people who vote are. All you see is “burrito node” voted this and that. lol.

Right now OP has about $700k in it. Who’s to stop the validators from conspiring and passing a proposal to send this $$$ to their wallets? $700k/100 = $7k paycheck for each val. I’m pretty sure bottom 97 vals who run negative would be tempted to vote YES and call it a day. And if they’re anonymous, we would have 0 chance to pursue any action. Even more so because the CP would be empty. This scenario is more likely to me than “regulators shutting down the chain”.

  1. If KYC would ever be implemented, it should not be dependent on the good-will of the validator. Good validators don’t need KYC. It is for the bad ones. And bad ones won’t ever do KYC. It should be then ‘coded’ like → IF a validator enters (or is in) the active set THEN → X days to KYC → If no KYC in 7 days, THEN → jail. IF yes KYC in 7 days → happy validating. But this should be somehow connected to solidproofs folder on github so that it is automatic. We could do it even better → only after KYC a validator can join the active set. I’m just freestylin’ here haha

  2. That being said, we are facing much more serious problems than GP. No amount of validator KYC or reverse splits will fix the abyss that we’re looking into, which is ORP depletion. So, let’s focus on something real since we’re running out of time. In 1-1.5 years there will be no chain to validate.

2 Likes
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Financial sovereignty and anonymity. This is how financial transactions were done for thousands of years without any problem. It is only the last 70 years or so - the “financial surveillance” era with autocratic/authoritarian governments pretending to be democratic, but using financial regulation as a means of controlling their populations and quashing dissent.

In today’s age your money can be frozen just because someone has a suspicion you might have done something bad at some time, with no evidence or independent adjudication required. Once your money is frozen in such a way, how can you fight back? In no normal world can this be considered to be a fair state of affairs but it is never-the-less where we find ourselves.

How quickly people forget the predatory SEC under the democrats. When Trump’s term ends we may yet return to that model. Not to mention Ursula von der Leyen’s increasingly dystopian and authoritarian EU that is clamping down on all crypto to ensure there are no competitors to their upcoming CBDC.

I do not trust any politician/government to act in a way that is in the best interests of their people, especially when it comes to finance.

1 Like
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I agree with the proposal. Even though I am not a supporter of KYC in a decentralized environment, I believe that we are at a delicate moment in our network. With enormous amounts of slander and defamation coming from network validators. Sovereignty and independence need to be separated from widespread lack of accountability.

We require KYC from everyone who touches L1, but we don’t have KYC from those who sign the check? That doesn’t make sense to me.

I am aware that this would make us an easy target for regulators. We are at a crossroads and we need to quickly choose a path forward.

We cannot allow our network to be seen as an environment for scams and cheating (Binance’s secret plan / Instant 6.4T burn).

I suggest that 100% of the active set be validated.

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I’m firmly against the KYC proposal for Terra Classic validators. Privacy and decentralization are the backbone of our blockchain — introducing KYC directly undermines both.

KYC will not stop misinformation or defamation, since most of that happens outside the chain and is hard to prove. Validator activity is already fully transparent on-chain, giving the community real oversight without sacrificing privacy.

Worse, KYC introduces serious risks: it centralizes control over sensitive data, makes validators targets for hacking or harassment, and could discourage new participants, weakening decentralization. It gives a false sense of security, while doing nothing to address the real problems.

This proposal trades core blockchain principles for superficial “protection.” Our strength lies in open, verifiable, pseudonymous operations — the very transparency and traceability that traditional finance lacks. The solution is community vigilance and on-chain monitoring, not giving up our privacy.

1 Like