Christy Goldsmith Romero, a commissioner at the US Commodity Futures Trading Commission (CFTC), has warned that anonymity in cryptocurrency transactions poses a national security threat. She spoke at the City Week conference in London on April 25th, highlighting that digital assets’ attractiveness lies in their anonymity, making them an ideal choice for “illicit finance“, particularly for “cybercrime“.
Per a recent Reuters report, she also noted that anonymity allowed criminals to avoid consequences, as they could conceal their tracks, with “hospitals, schools, and critical infrastructure” often falling victim to these crimes.
According to Romero,
“Fraud is a hallmark of digital asset markets, the human toll of which may be overlooked,” urging crypto companies and governments to take action against illicit financial activity and ensure that digital assets are not linked with fraud and criminal activity.
CFTC Commissioner Wants Crypto Anonymity Addressed
During her speech, Romero called for addressing digital identity and anonymity in the industry, adding that Congress is already contemplating new laws on the issue. She also expressed concern over the use of crypto mixers like Tornado Cash, which anonymize transactions.
Tornado Cash was sanctioned by the US government in 2022 following reports that hackers and other criminals were using it to launder stolen funds. Some of the hackers have been linked to the Lazarus Group, a North Korean state-sponsored hacking group that uses cyberattacks to fund the country’s military initiatives.
However, the commissioner for CFTC argued that crypto companies compliant with regulation should not be allowed to use mixers or any anonymizing technology, as it is the primary tool used in money laundering and terrorism financing.
She highlighted that crypto companies must show they have internal controls in place to ensure their services are not used for illicit financial activity while still providing customers with financial privacy.
Romero further argued that crypto companies should distance themselves from mixers and anonymity-enhancing technology while providing financial privacy to their customers.
Christy Goldsmith Romero’s call comes as regulators worldwide are grappling with how to regulate the cryptocurrency sector, with the European Union, the United States, and the United Kingdom seeking to get their arms around crypto before global norms are established.
