BlockProf

The Privacy Edition: Big Brother is Watching Your Crypto

EU bans property ownership (almost)

Another day, another threat to our crypto wallets. This time it comes from the EU.

As part of the EU's process in crafting new MiCA crypto reforms, it will be requiring private wallets to comply with know-your-customer rules.  It has been suggested this may even amount to a prohibition on exchange transfers to any private wallet for which the holder's identity cannot be confirmed.  This move  was widely criticized as an affront to privacy rights.  Coinbase CEO Brad Armstrong responded "Imagine if the EU required your bank to report you to the authorities every time you paid your rent merely because the transaction was over 1,000 euros."

To say that this is an affront to personal property, liberty, and privacy is an understatement. The US isn’t far behind. So what do we do about it?

The Privacy Toolkit:

First, get your coins off exchange. The crypto exchange CEOs would prefer you didn’t custody there anyway. Get a hard wallet, I like Ledger Nano.

Then learn about the various privacy options out there. Even if governments around the world weren’t taking a reactionary approach to crypto oversight, you should be focused on privacy anyway.

Don’t forget anyone you transact with, or any exchange where you buy coins that complies with Know Your Customer (KYC) rule, can use blockchain scanners to look at every blockchain transaction associated with your public key. Why should the barrista who sells you coffee for Bitcoin (who then has your public key) be able to look up your net worth on a blockchain scanner?

Some great tools to start learning crypto privacy:

To ensure privacy for your Bitcoin, use a Samourai Wallet or a Sparrow Wallet to run your bitcoin through coin join transactions on Whirlpool. (To really optimize privacy, use your own node as well, Samourai sells one called Dojo!)

Samourai Wallet @SamouraiWallet

How to Whirlpool on mobile, a tweet thread tutorial

BTC Sessions 😎 @BTCsessions

NEW TUTORIAL! PAYNYNMS In @SparrowWallet - Privacy Preserving Publicly Shareable Bitcoin IDs youtu.be/o-iDeLZ4BiE

Also consider the privacy coin Monero, a coin that naturally masks your transfers.

Monero || #xmr @monero

No one should be able to gate-keep access to human rights like privacy and the ability to transact. That's why #Monero ensures censorship-resistance through privacy, access through decentralized and approachable mining, and building out on/off-ramps via tools like atomic swaps.

ZCash is also cool, though requires a little more work and know how to ensure privacy.

Zcash Foundation @ZcashFoundation

#Zcash is a privacy-protecting, digital currency built on strong science. With it, people can transact efficiently and safely with low fees. Shielded $ZEC ensures transactions remain confidential while allowing people to selectively share address and transaction information.

In other Crypto and DeFi news:

The SEC once again denied a Bitcoin spot ETF application.

Circle has decided to use Bank of New York to custody its collateral backing the USDC stablecoin.

The international securities regulator group IOSCO issued a report warning about DeFi.  In contrast to these anti-DeFi screeds, this policymaker toolkit on DeFi from the World Economic Forum offers a more balanced view.

Meanwhile many in the decentralized finance industry are concerned about SEC overreach with respect to an SEC rule proposal about the definition of a dealer, with language hidden deep in the proposed rule described as a shadow attack on DeFi by leading crypto attorneys.

In other DeFi news, a TradFi bank has submitted a proposal to the decentralized bank MakerDao for start one of the first TradFi/DeFi partnerships in banking.

CME Group announced it is looking into offering futures on Solana and Cardano.