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ChristianKl comments on Open Thread, June 2-15, 2013 - Less Wrong Discussion
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Two nodes in the Ripple network that trade trust each other know their identities. The actual trade happens between those two nodes.
But even if they need to do more know-your-customer formalities I don't see why that should push the price much higher.
Google Ventures does invest in the company behind Ripple, so they seem to believe it's legal.