Congress Needs to Deal with Cryptocurrency Privacy
The US Congress should come up with potential legislative actions pertaining to cryptocurrencies which boasts privacy-enhancing features, a US government official emphasized.
“Congressional attention” is highly needed to deal with the matter, Robert Novy, deputy assistant director for the US Secret Service’s Office of Investigations.
“We should also consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies, services intended to obscure transactions on blockchains (i.e. cryptocurrency tumblers or mixers) and cryptocurrency mining pools,” Novy told the House of Representatives Committee on Financial Services.
“Some businesses, including providers of information and communications systems, are taking actions that impede timely access to digital evidence. As such, continued Congressional attention is warranted to ensure law enforcement agencies maintain lawful access to critical sources of evidence, regardless of where, or in what form, that information is stored,” he said.
Probing into cryptocurrencies and the transnational organized cybercriminals which maximize its usage requires highly-skilled criminal investigators, according to Nory.
“Hiring, developing, and retaining our investigative workforce, as well as partnering with and training our law enforcement and private sector partners to develop robust investigative capabilities, are all critical priorities for ensuring we are well prepared to address emerging risks resulting from technology innovation, both today and into the future,” he emphasized.
Moving forward, Novy asked legislators to bear this issue in mind. Noting the slow pace of deliberation in the country’s legislative department, he noted the lawmakers won’t likely take any measures to act on it anytime soon.
“As such, continued Congressional attention is warranted to ensure law enforcement agencies maintain lawful access to critical sources of evidence, regardless of where, or in what form, that information is stored,” he said.
“Such legislative or regulatory actions could take the form of new reporting requirements or data collection, retention, and accessibility requirements for certain businesses or business activities,” he added, citing the CLOUD Act as a significant step towards securing privacy of all users.
Although Novy did not indicate any specific privacy-focused coins, American officials have echoed their concerns in the past. In January last year, Joseph Battaglia, a special agent working at the FBI’s Cyber Division in New York City, noted other officials were concerned about cryptocurrency monero as well.
“There are obviously going to be issues if some of the more difficult to work with cryptocurrencies become popular. Monero is one that comes to mind, where its not very obvious what the transaction path is or what the actual value of the transaction is except to the end users,” Battaglia told about 150 law students of the Fordham University in New York.
Monero (XMR) was unveiled in April 2014 with bolstered privacy features. A fork of the Bytecoin codebase, the digital currency heightens identity-obscuring ring signatures, making it unclear which funds have been sent by a certain person and to another. The virtual coin saw its price surge two years ago, soaring 2,760 percent to about $12 from about $0.50 at the beginning of the year to about $12.