Home Market news Top U.S. Regulatory Official Calls for Crackdown on Crypto Anonymity

Top U.S. Regulatory Official Calls for Crackdown on Crypto Anonymity

  • The Commodity Futures Trading Commission is calling for a crackdown on crypto anonymity.
  • Congress is considering new legislation to address the anonymity of cryptocurrency.
  • Regulators worldwide are working to establish a uniform set of global norms for the crypto industry.

Christy Goldsmith Romero, a commissioner at the U.S. Commodity Futures Trading Commission (CFTC), has expressed concerns that anonymity within the cryptocurrency market is enabling the commission of illegal activities.

The top U.S. regulatory official, Christy Goldsmith Romero, has also stated that cybercriminals are using digital assets to finance their illicit activities. As a result, it includes individuals, companies, hospitals, and critical infrastructure being victimized.

At a City Week conference in London, Linda Lacewell, the superintendent of the New York State Department of Financial Services, highlighted the prevalence of fraud in digital asset markets. She emphasized that the human cost of these crimes should be considered, and called for greater transparency in crypto markets.

Lacewell urged both the industry and governments to tackle the issue of anonymity. Significantly, it is a key factor that makes crypto attractive to those seeking to engage in illicit financial activities.

Moreover, she argued that it is essential to address the use of “mixers” or software tools. The tools which will enable users to pool and scramble cryptocurrencies from thousands of addresses, effectively anonymizing their transactions.

In addition, Lacewell emphasized the need for legally compliant crypto companies to refrain from using such tools. She suggested that companies that are committed to complying with regulations should strive to enhance transparency and improve their risk management practices.

Congress Considers Legislation to Tackle Anonymity in Crypto

Ultimately, Lacewell’s message was clear: the issue of fraud in digital asset markets must be addressed proactively. Additionally, the use of anonymity-enhancing tools must be curtailed to protect consumers and ensure the integrity of the financial system.

Consequently, Romero revealed that Congress is currently deliberating new legislation to tackle the issue of anonymity and digital identity. Crypto companies seeking compliance must demonstrate their capability to implement internal controls that deter money laundering and terrorist financing.

The United States recently imposed sanctions on Tornado Cash, a virtual currency mixer. It is alleging that it facilitated the laundering of proceeds from cyber crimes committed by hackers from North Korea.

Romero stressed that crypto companies can uphold financial privacy for their customers while distancing themselves from mixers and anonymity-enhancing technologies.

As regulators worldwide scramble to grapple with the complexities of crypto, the race is on to establish a uniform set of global norms that can be applied across this borderless industry.

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