Academic paper suggests governments should attack public blockchains

An educational paper titled: “Reconciliation of Anti-Money Laundering Instruments and European Data Protection Requirements in Permissionless Blockchain Spaces” revealed within the Journal of Cybersecurity suggests that governments should goal cryptocurrencies — particularly privateness preserving chains — to fight cash laundering.

The creator of the paper outlined a number of strategies of undermining belief in permissionless blockchains together with 51% assaults, value suppression, and Sybil assaults — a sort of malicious exercise by which a single person creates a number of accounts to govern a community. The creator asserted:

“The users’ confidence in the networks may be significantly undermined by successful attacks on networks which could undermine the trust of the blockchain community in the ability of the network’s protocol to ensure smooth operation.”

However, the paper additionally argued that these strategies should solely be used as a “last resort” to fight cash laundering after different coverage initiatives akin to blacklisting pockets addresses, flagging transactions, sanctions, and different laws have been exhausted.

Ultimately, any strategy taken should try to stability the necessity to guarantee regulatory compliance beneath present legal guidelines, promote innovation, and the necessity to defend particular person person privateness, the creator concluded.

Although the paper was revealed in 2021, its findings lately got here into sharper focus after a number of customers theorized that a number of the similar techniques mentioned are presently getting used to govern the value of Monero (XMR) — a privacy-enhancing cryptocurrency named within the educational paper.

Related: Kraken to finish Monero assist in European Economic Area

Money laundering: simply an excuse to impose tighter management?

In 2022, United Nations officers revealed that terrorist organizations predominantly use money to finance illicit actions — an assertion later corroborated by a report from the United States Treasury, which discovered that felony organizations favor fiat forex to crypto.

Moreover, the May 2024 US Treasury report additionally admitted that even when digital property had been used for illicit actions, they tended for use to perpetuate age-old schemes that would have been dedicated utilizing money or different asset courses.

Still, this has not stopped the United States authorities from cracking down on crypto mixers and different privacy-enhancing instruments. On Sept. 26, 2024, a US choose dominated that the case towards Tornado Cash co-founder Roman Storm may transfer ahead.

The authorities crackdown on these privacy-enhancing instruments has sparked a debate in regards to the viability of those companies, as many customers ask whether or not crypto mixers can survive beneath the present regulatory regime.

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