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US authorities are taking action against crypto crime
User anonymity at risk
Outcry in the crypto scene
The fact that cryptocurrencies are used in connection with money laundering, black market transactions, blackmail software – called “ransomware” – and numerous other crimes is a thorn in the side of the US government. According to “Reuters”, a task force consisting of representatives from the FBI, the Secret Service but also from technology and security companies has taken up the fight and has already drawn up proposals on how the government can take effective action against such crimes.
The experts are calling for stricter licensing requirements for owners of crypto currencies and stricter money laundering rules. However, the focus is on the elimination of anonymity in crypto transactions.
End of anonymity?
The blockchain on which Bitcoin is based is an open source database that is accessible to everyone. Although all transactions are stored publicly and in the network, they are not stored with the name and address of the user, but only with a key that cannot be easily assigned to the corresponding user.
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This is exactly where the group of experts comes in: They want to oblige crypto exchanges to obtain personal information from their users. According to the report, a representative of the Department of Homeland Security admitted that the proposals would be a major cut, but this was necessary to ensure the safety of all.
“That would be a huge thing,” “Reuters” quotes a high-ranking representative of the Ministry of Homeland Security. “This is a world that was created specifically to be able to remain anonymous. But at some point you have to give up something in order to be able to ensure the safety of everyone.”
Horror in the crypto community
Some of the proposals would even require new legislation. Should they actually be implemented and anonymity cease to exist, Bitcoin and Co. would be deprived of one of their most important pillars.
The reactions in the crypto community are correspondingly. In an interview with “CNBC”, for example, Jesse Powell, CEO of the fourth largest crypto exchange Kraken, criticized the planned anti-money laundering law for a complete ID check of US citizens who carry out transactions with crypto currencies worth more than 3,000 US dollars , provides. He explained that crypto crime is only a very small part of the total cryptocurrency market. As evidence of this, he referred to a study by the analysis portal Chainalysis, according to which in 2020 just 0.34 percent of the total value of all crypto transactions were used for illegal purposes, after more than 2 percent in the previous year.
Also Jack Dorsey, CEO of Twitter and the financial services and mobile payments company Square, rejects government efforts that would enable it to assign a wallet to a specific person. According to “t3n” he warned that the plans could cause massive damage to companies. In his opinion, the planned regulations would lead to “unnecessary friction” between crypto users and financial institutions and could also set “counterproductive incentives”.
David Schwartz, the Technical Director (CTO) of Ripple Labs, has also expressed concerns about the efforts of the US authorities to gain access to all crypto transactions and the personal data of those involved. As he explained in an interview with “Cointelegraph”, he is particularly concerned about the “overlapping powers” of the various US authorities, as they have not yet agreed on a consensus on the treatment of cryptocurrencies. In view of this, it is “very difficult for crypto companies to understand which laws apply and how they are to be applied to innovative innovations”.
Finanzen.net editorial team
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