LONDON, April 25 (Reuters) – A top U.S. regulatory representative has expressed that the anonymity of cryptocurrencies are permitting them to be utilized for illicit purposes, and has posed a risk to national security that must be tackled.
Christy Goldsmith Romero, a commissioner at the U.S. Commodity Futures Trading Commission, stated that digital assets are being utilized to finance cybercrimes, which have affected individuals, corporations, medical centers, and essential infrastructure.
“Fraud is a hallmark of digital asset markets, the human toll of which may be overlooked,” Romero said at a City Week conference in London, noting that it was essential that the lack of transparency in cryptomarkets was addressed.
“It is imperative that governments and especially the industry to address what makes crypto so attractive to illicit finance, and that is the lure of anonymity,” she added.
Legally compliant crypto companies should not be using “mixers” or software tools that effectively anonymise users by pooling and scrambling cryptocurrencies from thousands of addresses.
“Congress is currently deliberating laws related to anonymity and digital identity,” Romero stated.
Compliant crypto companies must demonstrate that they have internal controls to deter money laundering and terrorist financing.
Last year, the U.S. applied sanctions on virtual currency mixer Tornado Cash, alleging that it aided hackers, including those from North Korea, to launder income from cyber crimes.
“It is possible for all crypto companies to keep away from mixers and anonymity enhancing technology while still providing customers financial privacy,” Romero said.
Additional reporting by Elizabeth Howcroft; Editing by Alexander Smith
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