The crypto compliance lie: Sacrificing privacy does not make us safer
In the last month, we’ve seen the United States Federal Reserve come after BitMEX for failing to identify customers, crypto intelligence firm CipherTrace report that most crypto exchanges are not collecting enough user info, and the so-called “FinCEN Files” demonstrate that even large banks that collect and report vast troves of suspicious transactions are not doing enough to unbank the bad guys. Suffice to say, it’s a great time to be alive for compliance hardliners and a rough patch for privacy advocates, aside from a healthy recent boost in the price of Monero (XMR).
Stepping back and looking at the larger trend, many in the crypto community are now imagining a world with two “ blockchains” — or perhaps, two distinct networks of various blockchains. The first is a blessed white blockchain, or “lightchain,” akin to a friendly neighborhood where everybody knows each other’s name; the other is a sinister “darkchain” full of drug traffickers, pimps and terrorists (as far as we know).
Zachary Kelman is the managing partner of Kelman PLLC, a boutique law practice based in New York specializing in matters related to cryptocurrency and blockchain technology. The firm handles both litigation and corporate matters, including advising on compliance with international standards for data and financial services. Zachary has advised governmental bodies and central banks around the world on the application of local and international laws to digital assets and their many uses.
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