Tag: Anonymity

CFTC Commissioner Calls for Reduced Cryptocurrency Anonymity

by Blockchain News

Christy Goldsmith Romero, a commissioner of the US Commodity Futures Trading Commission (CFTC), has called for reduced anonymity for cryptocurrencies. Speaking at the City Week 2023 conference in London on April 25, Romero emphasized the need to manage the risks associated with digital assets. She believes that anonymity is the primary feature that makes cryptocurrencies appealing to illicit finance and that this issue must be addressed by both governments and the industry.

In her keynote speech on Illicit Finance and Other Key Risks of Digital Finance, Romero stated that the risks associated with digital assets must be managed. She stressed that market integrity, national security, and financial stability are crucial and cannot be compromised. Romero’s proposal for reducing anonymity in cryptocurrencies could help to address these risks.

Cryptocurrencies are often used by criminals to evade detection and launder money. With the anonymous nature of transactions, it is difficult to trace the movement of funds and identify the parties involved. By reducing anonymity, it would become easier for law enforcement agencies to track down criminals who use cryptocurrencies for illegal activities.

Romero’s proposal may also help to address concerns around the regulation of cryptocurrencies. With greater transparency and traceability, governments and regulatory bodies would have greater visibility into cryptocurrency transactions, which could help them to identify potential risks and take appropriate action.

The issue of anonymity in cryptocurrencies has been a topic of debate for several years. Some argue that anonymity is an essential feature of cryptocurrencies and that reducing it would compromise privacy and security. However, others argue that anonymity enables criminal activities and that reducing it would make cryptocurrencies more legitimate in the eyes of the public and regulators.

Despite the debate, there have been several initiatives to reduce anonymity in cryptocurrencies. For example, the Financial Action Task Force (FATF) has introduced guidelines for virtual asset service providers (VASPs) that require them to implement measures to identify and verify their customers. Similarly, several countries have introduced Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations for cryptocurrency exchanges and other service providers.

In conclusion, Romero’s proposal for reduced anonymity in cryptocurrencies could help to address the risks associated with digital assets. However, it remains to be seen whether the industry will adopt such measures and whether they will be effective in managing the risks of cryptocurrencies. The debate around anonymity in cryptocurrencies is likely to continue, as governments and industry stakeholders grapple with the challenges posed by digital assets.

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Lightning Speed 004: What’s The Lightning Development Initiative?

by NEWSBTC

There’s no denying that 2021 was the Lightning Network’s year. What does the future hold, though? If the objective is to onboard the next billion people, the network needs work and fine-tuning. To grab the bull by the horns, The Human Rights Foundation and Strike set up three 1 BTC bounties. 

The bounties will go to the first person or team to develop an anonymous Lightning tip jar, a tokenless way to peg BTC to dollars, or a privacy-focused wallet that supports some kind of Chaumian e-cash feature. In a Twitter Spaces conversation about the program, they named it The Lightning Development Initiative. 

A catchy name that we’ll use from now on to refer to all of this. This fourth edition of Lightning Speed is all about the future. Let’s explore the three ideas and the new information that we have about each of them.

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The Lightning Development Initiative In Twitter Spaces

Among the speakers were Strike’s Jack Mallers, The Human Rights Foundation’s Alex Gladstein, Bitcoin Magazine’s Christian Keroles AKA CK Snarks, and Tales From The Crypt’s Matt Odell. It took place December 29th and Bitcoin Magazine hosted it. A Twitter user named Gigi summarized it for us.

Bounty #1: An Anonymous Tip Jar

In our sister site Bitcoinist’s report, they described the challenge as follows:

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“Can you create a Lightning tip jar that doesn’t reveal any information about the parties involved? That’s the first task. How to receive completely anonymous donations. According to Bitcoin Mag, the “goal is to enable anyone to use free and open-source software (FOSS) to print a QR code that can be used for receiving Lightning payments privately. Importantly, “The QR code should not reveal the public key or IP address of the user.” 

In the Lightning Development Initiative’s report, we learned that this has to do with the two competing protocols, Bolt12 and lnurl. Jack Mallers “pointed out the absolute need for interoperability on LN and that even though lnurl might not be “optimal” right now, the market will eventually decide what open standard they prefer to use. He thinks that currently UX is a major focus for the LN community and we should make peace with the fact that there will be competition between solutions.”

Mallers put forth another interesting idea, “contrary to the Bitcoin main chain, we can somewhat afford to f**k up on the Lightning Network. As long as the Bitcoin monetary policy is not threatened then we can freely fiddle on top of the protocol via Lightning.”

BTCUSD price chart for 01/14/2021 - TradingView

BTC price chart for 01/14/2022 on Bitfinex | Source: BTC/USD on TradingView.com

Bounty #2: Stablecoin On Lightning Without A Token

Bitcoinist described this one as:

“The second challenge seems to be even more difficult, at least on a conceptual level. The HRF and Strike want a wallet that enables “anyone to “peg” an amount of bitcoin to U.S. dollars without needing an exchange or another token.” That’s right, without a centralized entity. And relying only on sats and bitcoin.”

Gigi summarizes why the world needs this:

“The goal is to allow people to access dollars without a single point of failure. Further down the line, as Bitcoin becomes less volatile, these people can use btc, but until then there’s massive demand for holding value in dollars. The tether market cap is proof of this.”

Bounty #3: A Chaumian E-Cash Feature

First of all, Investopedia defines Chaumian e-cash as:

“eCash was a digital-based system that facilitated the transfer of funds anonymously. A pioneer in cryptocurrency, its goal was to secure the privacy of individuals that use the Internet for micropayments. eCash was created by Dr. David Chaum under his company, DigiCash, in 1990.“

So, once again, anonymity is the priority. As Alex Gladstein put it when announcing the bounties, they’re “for the first open-source, non-custodial, non-KYC Lightning wallets to ship features requested by dissidents worldwide.” Also, take into consideration the words of security expert Brian Trollz’s words, “Bitcoin without privacy is nothing but a surveillance system.”

What does Gigi have for us on this topic? “We need a sort of Chaumian e-cash, extremely easy to use for the Plebs and accessible. Maybe the solution is a federated  one, making it harder to regulate.” He then quotes Jack Mallers again, “There’s going to be a singular standard for the internet of money (Bitcoin). Many will compete on top of BTC so we need “interoperability to the standard.”

Conclusion: The Future Is Bright

Developers, teams, companies, anyone can earn the Lighting Development Initiative’s bounties. The non-profit OpenSats will serve as the judge. They are all open for the whole year. If by the end of 2022 no one has claimed them, the money will go to the Human Rights Foundation’s Bitcoin Development Fund on January 1st. Which is fair. Especially considering they gave 425 million Sats to these worthy organizations and individuals.

For more information and details read Bitcoinist’s original report.

Featured Image by Micah Tindell on Unsplash  | Charts by TradingView

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Crypto can erode tax base, Russia’s tax boss says

by Cointelegraph

The Russian Federal Taxation Service (FNS) is actively monitoring the cryptocurrency market to prevent tax evasion, FNS head Daniil Egorov said.

Cryptocurrencies can potentially cause “significant erosion” to Russia’s tax base, Egorov argued in a Monday interview with the local publication RBC.

But cryptocurrency transactions are still traceable and should be reported, the official said, adding that FNS is ready to deploy automated tracking systems to process big data volumes.

“When you get into the digital space, you still leave a trail somewhere. And it’s a matter of time before this trail is identified,” Egorov declared.

The official also noted that FNS is now coming up with ways of responding to crypto tax evasion practices as the authority looks to curb such activity rather than just to identify it. “We would like to find solutions that shut down a problem as a phenomenon rather than just identifying actions by a specific player,” Egorov added.

The Russian State Duma approved a bill on cryptocurrency taxation in the first reading in February 2021, requiring residents to report crypto transactions of a total amount exceeding $7,800 per year. In order to move forward with the second reading, lawmakers decided to assign a responsible committee, the State Duma Committee on Budget and Taxes, in mid-October.

According to Sergei Khitrov, founder of the Russian cryptocurrency event Blockchain Life, Russian crypto businesses could potentially generate as much as $4 billion worth of taxes per year. According to him, the local crypto community has so far demonstrated a “complete failure” to understand how to pay taxes on crypto.

Related: House passes $1T infrastructure bill with crypto tax for Biden’s approval

The news comes as American lawmakers fight back against changes to tax reporting rules for crypto transactions over $10,000 in the newly passed infrastructure bill. The bill was initially approved by the Senate in August, which was met with a proposal for a compromise amendment by a group of six senators, including pro-Bitcoin (BTC) Senator Cynthia Lummis