Crypto must eliminate anonymity for criminal money.

LONDON, 25 APRIL (Reuters) – Anonymity allows crypto assets to fund illicit operations, according to a senior US regulatory official on Tuesday, creating national security vulnerabilities that must be addressed.

According to Christy Goldsmith Romero, a Commodity Futures Trading Commission commissioner, cryptocurrencies are being used to fund cybercrime, with victims including people, businesses, hospitals, and vital 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 that the lack of transparency in cryptocurrency markets must be addressed.

It’s critical for governments, especially the industry, to address what makes crypto so appealing to illicit finance, which is the allure of anonymity,

She added.

Legally compliant crypto firms should not utilize “mixers” or software tools that effectively anonymize users by pooling and scrambling cryptocurrency from hundreds of addresses.”Congress is already considering new laws addressing anonymity and digital identity,” Romero said.

Compliant cryptocurrency enterprises must demonstrate that they have internal procedures to avoid money laundering and terrorist funding.

The United States sanctioned virtual currency mixer Tornado Cash last year, saying it assisted hackers, particularly those from North Korea, in laundering money from cybercrime.

All crypto companies can distance themselves from mixers and anonymity-enhancing technology while still providing customers with financial privacy

Romero added.

Regulators in the United States, the European Union, the United Kingdom, and others attempt to understand crypto before global rules for a borderless industry are agreed upon and implemented.

As a result, different people are doing different things, and, yes, absolutely, firms are picking and choosing where to set up shop,

Said John Schindler, secretary general of the Financial Stability Board (FSB), the G20’s financial regulations coordinator.

According to him, the FSB will shortly announce the final version of its proposals for regulating crypto-assets.

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