We just got a glimpse into exactly how much regulators are watching...
There was a very sobering report out in Cointelegraph this morning that gave some details just how deep the watchdogs go...
And here's a teaser, it's a lot further than you likely guessed.
The gist of the report was basically this...
If you have ever used a centralized exchange and had to provide any KYC/AML information to that exchange, authorities likely know what you have, how much you have, and where you have it.
Yep... scary.
Some of the particularly interesting quotes from the article...
"I’ve worked for crypto exchanges, bitcoin ATM companies, general crypto services providers, and more. They all engage in surveillance practices. They have no choice.”
"In traditional institutions, a transaction needs to meet certain criteria in most cases to be deemed suspicious. That’s not really true for Bitcoin and other cryptocurrencies though. As far as the government is concerned, the threshold of ‘suspicious’ is met as soon as cryptocurrency is involved.”
“Custodial entities are legally required to file SARs for basically any [suspicious] crypto-related transaction above $5,000, regardless of the user’s other activity. Many file for lower amounts. The entities are legally barred from revealing this reporting data to users, or any member of the public. We can not tell you we’ve filed a report on you — ever. And entities can not refuse to comply with these reporting tactics because if they do, they will lose the licenses which allow them to operate. They may face fines or even imprisonment.”
And the really scary part...
"What coins you hold, how often you trade, the initial source of any funds used to buy crypto, the amount of profit you’ve taken within a certain period of time. They can and do ask for it all. They also keep track of where your coins are sent once they leave centralized custody. So if you’re keeping your coins in cold storage, there is a good chance that some office within one or more world governments is aware of that wallet address. No matter where you move them, if a centralized exchange has ever held those coins, they can track you.”
Oh and if you have ever had an experience in crypto where your funds seem to be frozen for no apparent reason or there was some delay in a transfer that was out of the ordinary there is a decent chance that was due to a suspicious activity review/report being conducted...
“Frozen accounts or funds. If you’ve had login issues that barred you from accessing your account. Anything like that likely means you have been subjected to a suspicious activity report without your knowledge. Or a government entity may have requested insight about you or your funds, in which case you may not be allowed to move forward until their review is complete.”
More on this can be seen here:
https://cointelegraph.com/news/nevermind-coinbase-big-brother-is-already-watching-your-coins
Not sure about you, but this was a pretty big eye opener for me.
And we thought they were behind the curve on crypto, nope, they've been watching and monitoring this whole time.
Stay informed my friends.
Image Source:
https://villains.fandom.com/wiki/Big_Brother_(Nineteen_Eighty-Four)
-Doc
Posted Using LeoFinance
The only reason all these analysis tactics work is because no one is actually using crypto as currency. Everyone is just using it speculatively and "hodling".
When the entire contents of one wallet are dumped to another they just assume the same person owns the receiving wallet. There will be ways to avoid this going forward, by changing ownership of an entire wallet this entire tracking system can be broken. Physical cash can be used to accomplish this until it is inevitably banned.
It also gets busted up by using privacy coins and mining and sending the money to random addresses. Atomic-swaps are going to be a nightmare for these surveillance analytics. Crypto is an evolving beast. The more it gets attacked the more resilient it becomes.
It's also important to note that "possession is 9/10ths of the law". If you're being accused of owning a wallet but then law enforcement can't prove that you control the private keys, seems like there will be court cases that just get thrown out because the obvious evidence needed doesn't exist.
On top of that, the argument can be made that just because law enforcement found private keys doesn't mean those keys aren't shared by other parties. I expect to see a court case where money is transferred while the suspect is in custody. There will also be situations where multiple keys are needed to transfer money and law enforcement will have no idea.
Should be interesting to be sure. Lot's of crazy stuff is bound to go down. Just look at the Craig Wright case. It's obvious he is lying at every turn and yet they still can't force him to fork over the money. What about the cases that aren't in the least bit obvious? This is going to be a nightmare for the IRS and the Secret Service going forward, and when it happens Monero value will skyrocket along with other privacy chains.
Yep, you nailed it on the head here!
If people start spending and doing peer to peer transactions, their tracking methods and models go out the window. At that point they will probably come up with some law that requires stake to be tied an owner somehow...
I disagree about the privacy coins however, at least in the short term. I think governments around the world will get together and ban them, which we are already seeing. If those coins aren't allowed on any exchanges it will be tough for them to have much value beyond the underground niche community that uses them.
Dear @jrcornel
Would it mean, that users on HIVE have less reasons to worry since many users are actually using HIVE as a currency and there is quite high amount of transfers going on?
I'm very curious. It's all quite new to me.
Yours, Piotr
Yes I mean if the crypto is used as a currency it is more difficult to tell who the owner is, but on hive there are names attached to transfers so it is pretty easy to see who owns what. And if that account ever went to a centralized exchange, they can match up the real world identity to the hive account.
Lol interesting news for maybe when im rich enough to worry.
It may be one of those things they keep in their back pocket. So, if they want to nail someone for something they can always play that card if they can't make anything else stick...
Trueeee
KYC is the key to our privacy.
One must be careful with his/her identity
I'm not surprised at all.
That's the way it works in any aspect of our lives.
Why would they exempt crypto?
After all, on the blockchain is even easier to track all the activities.
Posted Using LeoFinance
Yep. It's funny because bitcoin and the like were born to be outside of the current financial system and the watchful eye of big brother government. However, with a few tweaks and laws, regulators and the government could know even more about you and your money than they did before bitcoin was created... How's that for ironic?
All the more reason to divorce crypto from government control as much as possible.