Crypto identity contradiction: Blockchain anonymity meets KYC regulations
To balance increased regulatory scrutiny with smooth user experiences, cryptocurrency players are turning to comprehensive identity verification platforms. People value the anonymity of a decentralized blockchain. Each user has a pseudonym in the form of a wallet address, which is stored in a decentralized ledger for every cryptocurrency transaction. So why do crypto platforms need identity verification? Fraud and the potential for harm have become too great to ignore, and regulators are paying attention, according to Christy Goldsmith Romero, a commissioner at the U.S. Commodity Futures Trading Commission. The commissioner also noted that cryptocurrencies are being used to fund cybercrime. “It’s essential for governments and particularly the industry to address what makes crypto so attractive to illicit finance,” Romero said, “and that is the allure of anonymity .” There remains uncertainty about what new regulations will dictate and how they will be administered. Crypto platforms m...