Congress should take action against confidentiality pieces: a secret service official

A senior US secret service official has asked Congress to take action against privacy cryptocurrencies, such as zcash and monero, which include features designed to help users make anonymous transactions.

In a testimony prepared Wednesday before the Subcommittee on Terrorism and Illicit Finance of the House of Representatives Financial Services Committee, Robert Novy, Assistant Deputy Director of the Investigation Bureau of the Secret Service, called on lawmakers to adopt measures. called "confidentiality pieces".

"We should also consider other legislative or regulatory measures to address potential issues related to anonymity-enhanced cryptocurrencies, services to hide transactions on block chains (cryptocurrency cups or mixers), and pools. encryption.

Although Novy does not mention any of these pieces by name, the most important cryptocurrencies in terms of privacy are monero and zcash. Monero transactions by default hide senders and recipients, while zcash users can take advantage of the protocol's "shielded addresses" when they want to keep private transactions.

Contrary to popular belief, bitcoin and most other cryptocurrencies are pseudonyms, not anonymous ones, and there are powerful analysis tools that can map blockchain data. However, bitcoin users can use tools such as "goblets" and "blenders" to make it more difficult to track funds to their source.

Law enforcement officials and regulators around the world have often worried about the prevalence of these privacy-saving technologies, although supporters point out that they are no more anonymous than money. physical.

As reported by CCN, the Japan Financial Services Agency (FSA) - the government agency that regulates the exchange of cryptocurrency in the country - lobbied the trading platforms to remove confidential documents.

Notably, the New York Financial Services Department (NYDFS), which oversees perhaps the strictest cryptocurrency regulatory framework in the US, recently approved Gemini's request to list zcash on its platform. .

Whether Congress acts or not, Novy had strong words for criminals who would seek to finance their activities using cryptocurrency (which happens far less than most people think).

"Those who seek to develop their illicit activities using digital currencies should not be fooled by the fact that they are out of reach of the law," he concluded. "As the investigative work of the Secret Service and our law enforcement partners continues to emerge, we are relentless in enforcing the law and are not impeded by the perceived anonymity of the Internet or digital currencies.