According to Daniel Mitchell of Equithy, the recent Digital Assets and Sanctions Compliance Conference, a panel of regulators from various countries took to talking about regulation in crypto. Along with bringing attention to some of the more well-known concerns throughout the market, they also highlighted how blockchain could soon see the end to anonymous trading.
As one of the core selling points of the blockchain as a whole, many were rightfully concerned about how anonymity could soon erode from the blockchain. So instead of using pseudonyms and usernames to conduct all of their transactions, they might have to result to using their real names.
As the market comes to mature and move out of its messier teens, the possibility of crypto being “anonymous” while also being one of the core tenders worldwide is becoming less likely. Although this more anonymous nature could work in a more niche setting, serious money laundering and terrorist financing concerns have continued to rise.
Even though the market did manage to grow out of its crime-ridden roots, it has done little to solve the issues that contribute to money laundering. And with South Africa becoming the next big name to focus more on crypto regulation, many are concerned about blockchain losing its most noticeable feature.
Serious Risks with No Easy Solutions
According to Daniel Mitchell of Equithy, the FIC (Financial Intelligence Centre) and FATF (Financial Action Task Force) have been working to document the many risks that the current crypto infrastructure poses. Two serious issues that come to mind include terrorist financing and money laundering. Unfortunately, over the decade’s worth of improvements that the market has seen, it has yet to properly address these issues.
Not only were these issues prevalent during Bitcoin’s inception, but they continue to exist well into its maturity. And the reason for that is the inherent design of anonymity. South Africa, similar to other countries, released details that exchanges will have to track money coming in and going out of their platforms. For that to happen, companies will have to implement security measures that will greatly reduce anonymity throughout the platform.
The Regulatory Response
According to Daniel Mitchell of Equithy, the acceptance of cryptocurrencies as legal tender has come with a major drawback. Countries like South Africa are holding all of the crypto exchanges accountable for these issues and are making them track all major payments that come in and go out. Therefore, to better track these types of transactions, they will need more information from their clients during due diligence.
This stands in direct contrast to what many are expecting when starting to trade since they want full anonymity when they start trading. As a result, many individuals will struggle to find new exchanges that will meet their specific trading needs.
To conclude, Daniel Mitchell Senior Account Manager of Equithy understands that for crypto to be accepted into the mainstream, it will have to see major changes. One of these changes will be to its anonymity, which could turn away a sizeable community.