Categories: MarketsMenafn

CFTC Commissioner Calls for Digital Identity Verification to Combat Illicit Crypto Activity

Commodity Futures Trading Commission (CFTC) Commissioner Christy Goldsmith Romero has emphasized the importance of digital identity verification for users in the cryptocurrency space. During a keynote speech at City Week 2023 in London, she highlighted that Congress is considering new legislation to address anonymity and digital identity concerns.

Addressing Anonymity: A Key Factor in Illicit Crypto Finance

Goldsmith Romero expressed the need for governments and the industry to confront the primary attribute that makes cryptocurrencies attractive for illicit finance: anonymity. She argued that the risks associated with digital assets must be appropriately managed to maintain market integrity, national security, and financial stability, which should never be compromised.

Romero proposed that the industry tackle identity verification challenges to mitigate illicit finance risks in the cryptocurrency market. While public blockchain technology provides transparency and traceability, she noted that mixers and anonymity-enhancing technology significantly increase the risk potential. Romero stated:

“Crypto companies can distance themselves from mixers and anonymity-enhanced technology while still appropriately providing financial privacy for customers.”

The Role of Crypto Mixers and Recent Sanctions

A crypto mixer is a service that combines the cryptocurrencies of multiple users to obscure the origins and owners of the funds. As Bitcoin, Ethereum, and most other public blockchains are transparent, achieving this privacy level is difficult.

Discussing the need for identity verification, Romero cited recent United States Treasury Department sanctions against two mixers – Blender and Tornado Cash.

According to her, Tornado Cash was allegedly involved in laundering $7 billion. That includes millions of dollars the North Korean state-sponsored hacking group Lazarus Group stole. The outfit has been implicated in cyberattacks to support illicit nuclear and ballistic missile programs.

Urging Digital Identity Verification for Exchanges and DeFi Platforms

Commissioner Romero called for exchanges and decentralized finance (DeFi) platforms to verify users’ digital identities. She pointed out that many DeFi services are not entirely decentralized but are instead maintained by central parties who could verify identities and may be held accountable for doing so.

Romero also mentioned that existing technologies can provide digital identity, and more solutions are being developed. With Congress considering new legislation to address anonymity and digital identity, the U.S. government will continue prioritizing the prevention of cryptocurrency usage for illicit finance.

The post CFTC Commissioner Calls for Digital Identity Verification to Combat Illicit Crypto Activity appeared first on CryptoMode.

Jerry Rolon

After working for 7 years as a Internet Marketer, Jerry now aims to explore the journalistic side of Internet. With his impeccable knowledge in this domain, he churns out some of the best news articles from the internet niche. With respect to acedamics, Jerry earned a degree in business from California State University.

Recent Posts

Dogecoin Price Recovery Stalls After 24% Weekly Fall

In the last week, Dogecoin (DOGE) fell 24% to $0.31, one of the largest declines…

22 mins ago

PivAssets Rewards Excellence: 3 Luxury Villas in Florida Up for Grabs!

California, USA, 23rd December 2024, ZEX PR WIRE, At PivAssets, we believe in rewarding our…

13 hours ago

Rexla Global Launches Multi-Service Digital Platform with RXG Token, Targeting Widespread Adoption of Blockchain Services

Dubai, UAE, 23rd December 2024, ZEX PR WIRE, Rexla Global, a next-generation multi-service digital platform,…

13 hours ago

Ripple’s RLUSD Stablecoin Sees Muted Launch, $3 Million in Daily Trading Volume

Ripple’s highly-anticipated stablecoin RLUSD has seen a relatively muted launch, with trading volumes in the…

3 days ago

Bitcoin ETFs Face Record Outflows Amid Market Decline

Bitcoin exchange-traded funds (ETFs) experienced a substantial sell-off on December 19, recording net outflows of…

3 days ago

Paytora Simplifies Your Finances: Instant Crypto Conversion with an All-in-One Platform

Vancouver, Canada, 20th December 2024, ZEX PR WIRE, Paytora, an all-in-one digital banking platform that…

3 days ago