- The Commissioner of the Commodity Futures Trading Commission, Christy Goldsmith Romero, has urged crypto companies to distance themselves from anonymity tech, saying it poses national security and other risks, including the financing of terrorism, the drug trade, darknet markets, cyber gangs, money launderers, and malicious state-sponsored activity.
- Romero believes that anonymity is the key to crypto’s illegal use cases, and cited the Chainalysis report that found $3.8 billion was stolen in crypto hacks in 2022.
- Crypto companies need to balance protecting financial privacy with preventing illicit transactions, and work together with regulators and lawmakers to help stop wrongdoing while empowering people with the right to choose digital assets for a whole range of functions.
CFTC Commissioner speaks of distance
CFTC Commissioner, Christy Goldsmith Romero, recently spoke in London about digital assets and how they should distance themselves from anonymity tech. During her speech, Romero emphasized the illicit financial use cases of cryptocurrencies and highlighted the risks associated with the allure of anonymity. She noted that crypto’s darkest corner facilitates the financing of terrorism, the drug trade, darknet markets, cyber gangs, money launderers, and malicious state-sponsored activity. She went on to say that anonymity was the key to crypto’s illegal use cases and that mixers and technology designed to enhance anonymity present a substantial risk.
Despite the public blockchain’s ability to provide traceability and transparency, the use of anonymity-enhancing technologies and mixers has made it difficult for governments and the industry to prevent crypto’s illicit use cases. The Chainalysis report found that $3.8 billion was stolen in crypto hacks in 2022. However, digital assets are easier to trace than traditional assets, such as cash, and law enforcement agencies like the FBI are aware of this.
Romero urged the private sector and international governments to coordinate and work together to stop wrongdoing, while still protecting privacy and empowering people with the right to choose digital assets. Brent Xu, CEO of Umee, echoed her sentiments, stating that the digital asset industry can work with regulators and lawmakers to help stop wrongdoing, while still allowing for the choice of digital assets for a range of functions. The CFTC commissioner believes that distancing crypto companies from anonymity tech will help address the risks associated with the illicit financial use cases of digital assets.