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Mastercard Files Patent for Increasing Anonymity of Blockchain Transactions

Mastercard has filed a patent that aims to anonymize transactions on a blockchain, rather than just the user behind any individual wallet.

Mastercard has filed a patent for a method of anonymizing transactions on a blockchain, according to an application published by the United States Patent and Trademark Office (USPTO) Dec. 9.

The filing outlines that “the use of one or more intermediary addresses to obscure the source and destination of funds in a blockchain transaction” can be used in order to “increase anonymity of entities associated with blockchain addresses.” The proposed technical solution would entail a series of “anonymization request[s]” designed to anonymize the transactions themselves, rather than just the user behind any individual wallet.

This would “result in showing the user only transferring funds to and receiving funds from a small number of addresses that are also involved in a significantly large volume of transactions with various other users, thereby rendering the data innocuous.” Analysis of the wallet, Mastercard suggests, would thus yield “little to no information” about the user behind the wallet.

As context, Mastercard notes that while many “are flocking” to various blockchain-based cryptocurrencies, such as Bitcoin (BTC), for the perceived “high level” of anonymity they can provide, “the nature of the blockchain as an immutable ledger is such that every transaction can” – ultimately – “be traced and followed back to the genesis block.”

This fact, Mastercard suggests “run[s] counter to the the primary aim of many users in using a blockchain: anonymity.” Blockchain data can, once accumulated and analyzed, “eventually reveal the user behind a wallet or at least provide information about them, such as geographic location, interests, spending habits, etc.” The filing continues to suggest that:

“The existing communications and attribution structure of blockchain technology such as Bitcoin require identification of where the transactions are emanating and terminating, in order to maintain the ledger. This creates a technical problem of competing interests within the technology.”

Mastercard is by no means the first to tackle the limitations of anonymity within blockchain systems; two high profile privacy-focused altcoins, Zcash (ZEC) and Monero (XMR), are both designed with similar concerns in mind.

ZEC uses Zero-knowledge proofs (ZKP) technology, an alternative algorithm for authenticating distributed ledger entries, in which transacting parties provide proof of validity, but all other information remains encrypted, including their identities. Monero, meanwhile, uses stealth addresses to mask identities by enabling a sender to create a random one-time address that is based on the transaction receiver’s published address.

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Crypto is a ‘Poor Form of Money’ for Terrorists, Congressional Hearing Concludes

Cryptocurrency is a “poor form of money” for most terrorists, says director of analysis at U.S. think tank FDD’s CSIF Yaya Fanusie.

The U.S. Congress Subcommittee on Terrorism and Illicit Finance has discussed various methods of terrorism financing with cryptocurrency, according to an official press release on the U.S. House of Representatives Financial Services Committee September 7.

In order to monitor threats and methods of terrorist financing, the hearing considered major means of transferring funds by terrorists, including traditional financial institutions and semi-formal methods, such as the hawala exchange system, as well as cryptocurrencies.

However, while al-Qaeda, the Islamic State, and other terrorist groups have all attempted to raise funds through crypto, they have not had great success, as Congress concluded in the meeting.

Yaya Fanusie, director of analysis for the Foundation for Defense of Democracies (FDD) Center on Sanctions and Illicit Finance, stressed that most terrorists, especially those that serve on “jihadist battlefields,” are currently living in environments where crypto is not operable, which means that fiat use is preferable for buying goods.

Fanusie pinpointed fiat money as the most anonymous method for funding, claiming that it is very popular among terrorists.

While Fanusie stated that crypto is a “poor form of money for jihadists” and “cold hard cash is still king,” according to a Forbes article, he still acknowledged that “there are multiple examples of terrorist cryptocurrency funding campaigns.”

The expert further stated that in order to combat the potential successful use of crypto fundraising campaigns by terrorists, the U.S. government bodies that are responsible for terrorist finance investigation should become more skilled in analyzing cryptocurrency transactions. Fanusie noted:

“By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance.”

At this point, Fanusie appeared to recommend that the authorities should focus on minor crypto exchanges that trade alternative tokens or “privacy coins” instead of major exchanges that have significantly boosted their anti-money laundering (AML) and know-your-customer (KYC) policies over the past few years.

Earlier this year, risk management giant LexisNexis partnered with crypto exchange Blockbid in order to introduce security solution for exchanges dubbed “Trade with Confidence,” which intends to prevent terrorism financing, among other illicit activities.

In January 2018, Rep. Ted Budd (R-NC) of the House Financial Services Committee introduced a bill that aims to fight terrorism by offering rewards for information that leads to convictions of cryptocurrency-supported terrorism.

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European Parliament Members, Blockchain Experts Meet to Discuss ICO Regulation

Members of the European Parliament along with blockchain experts met Tuesday, September 4, to discuss possible regulations for Initial Coin Offerings (ICO).

At the recent EU event entitled “Regulating ICOs — Is the Crowdfunding Proposal what we were looking for?” the attendees examined the potential complications currently arising in the ICO industry.

Ashley Fox, a British Member of the European Parliament, pinpointed three main issues to consider at the meeting: challenges faced by ICOs in raising capital, the existing regulatory approaches on the matter, and the future perspectives of the industry.

In his testimony, Peter Kerstens, chairman of the the European Commission’s Taskforce on Fintech, pointed at the “dramatic increase” of ICOs’ volumes in 2018, despite the increasing number of reports on fraudulent ICO projects. According to Kerstens, the growing figures mean that ICOs are “very interesting and promising vehicle instruments” for raising capital.

Kerstens stressed the fact that while the ICO industry faces mainly similar problems with other traditional funding activities, it is still different in terms of the amount of money that can be raised. As a major benefit, Kerstens stressed that while it is “extremely hard to raise millions of euros for a startup,” it is “not that hard” for an ICO project.

Addressing the issue of the main differences between ICOs and crowdfunding, Kerstens stressed the fact that ICO tokens are not “intermediated,” which means there is no third party between issuers and investors, posing the main subject of concern.

According to Kerstens, most of the aspects of ICOs “cannot be covered by crowdfunding proposals” due to the multiple differences between the industries as well as the uncertain status of ICOs as financial instruments, among other reasons.

Turning to the question of ICO regulation, Aeternity’s global communications expert Julio Alejandro has provided a “very original contribution,” claiming that there is no way to stop an ICO project from creation except by banning crypto exchanges.

Alejandro claimed that “you can complain, you can cry, you can believe,” but “the only way that you can actually stop an ICO from creation is stopping an exchange,” adding:

“Whenever you want to stop the diffusion and relocation of information, how are you gonna stop it? Are you gonna ban USBs, the computers? What exact are you gonna ban? You’re banning knowledge.”

Alejandro then stressed the benefits of the ICO industry that are highly valued by the crypto community, such as an ICO’s anonymity, borderless character, mutual transparency, and ability to operate without an intermediary.

Alejandro further stated that if any centralized organization “tries to regulate ICOs in some sense,” the industry would become “obsolete” from its technical perspective.

On September 7, economic and financial affairs ministers from the EU’s 28 member states are set to hold a meeting on the challenges posed by digital assets and the possibility of tightening regulations. The event, scheduled to take place in Vienna, Austria, will discuss the main issues around crypto, such as tax evasion, terrorist financing, and money laundering.

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Code as a Weapon: Amir Taaki Wants You to Join the Real Crypto Revolution

There are many words that could be used to describe Amir Taaki – but today, ambitious is best.

The infamous bitcoin developer – known for co-creating Dark Wallet, Darkleaks and OpenBazaar – took the stage during a hackathon he hosted in the wake of the Privacy Enhancing Technologies Symposium (PETS) in Barcelona last week, the same city where he plans to set up his academy of coders, hackers and philosophers dubbed Autonomous Polytechnics.

It’s a bit of a shift, about 1,800 miles to the West from Taaki’s earlier idea, which was to build the academy in Greece. But with a toolset focused on anonymity and autonomy, it might make more sense to build the project in the capital city of the autonomous Spanish community of Catalonia.

Spending no time mulling over the decision, Taaki took to sketching out his political vision on a dirty whiteboard.

In a series of diagrams, Taaki described the evolution of biological cells, the structure of societies and the impact that technology can have on such systems, sparking runaway trends to monopolization, or its opposite — atomization.

Tying the latter to the UNIX philosophy, a branch of coder theory that vouches for minimal and modular units of software, Taaki then exposed the upcoming product suite his academy will build.

Albeit loose mathematical sequences, the audience could tell the scripts comprised the details of an entire dark machinery, a kind of subterranean web 3.0. Distilling the wide-ranging talk, one attendee quipped, “Plans to anonymize the world.”

And while Taaki insisted the details on the whiteboard not be published for fear they be co-opted – “There’s a lack of ideas in this space,” he told CoinDesk – it’s clear the tooling he’s got in mind would be a revolution, which is exactly what he wants.

Having left bitcoin development to fight alongside a Kurdish militia in Rojava, an autonomous region in northern Syria, Taaki is hoping to spread that region’s practices of democratic confederalism, a political theory that advocates for small, self-governing communities.

“Every revolutionary movement needs to have a technological arm, and we are the technological arm of the democratic confederalist movement,” Taaki told CoinDesk,

“This is our objective as an organization, which is using technology for autonomous democracy and the collapse of the system of nation states around the world.”

Politics and tech

To make this happen, Taaki expects participants of the academy to undergo a strict training. Newcomers are subject to a three-month introduction period, one that repeats every six months to one year.

“It’s a vehicle for developing them as leaders, to develop their skills technically, socially and being able to effectively organize other human beings and coordinate together tightly,” Taaki told CoinDesk.

While there’s room for ideological diversity within the organization — for example, Taaki wants to set up multiple tiers of participation and a system of allied academies globally — core attendees will need to follow careful timetables, give up other engagements and dedicate themselves fully to the project.

“Together we can elevate each other higher, we can learn from each other, we can dedicate ourselves to a sense of purpose and become stronger,” Taaki said. “And because we gain something from this, we are willing to forgo certain comforts of life, certain smaller freedoms for an even bigger freedom that we want to grasp.”

For himself, Taaki lives a rigid lifestyle: lifting weights, measuring his meals, avoiding weed and alcohol. And with the occasional snide remarks about “lazy hacker culture,” he doesn’t hide his disdain for those who don’t.

“You can’t party and have the revolution at the same time. They’re mutually incompatible things,” he told CoinDesk.

That’s one of the outcomes he fears for bitcoin, and even the cryptocurrency community as a whole – that while it has attracted some of the best minds in technology, there’s a risk that it will simply devolve into play.

“There’s a danger that bitcoin as this transformative tool to liberate humanity will just be turned into a nice subculture where we meet up with friends at conferences and a few geeky people play around, make investments, but it’s nothing more, and the potential that exists, that truly exists inside of bitcoin, does not get realized,” he said.

That’s why instead he wants his followers to have a serious drive.

That drive is a mix of both the democratic confederalism of the Rojava movement and a distinct theory of technology theorized by American philosopher Lewis Mumford.

The basic premise of democratic confederalism is self-governance, but the theory also elevates environmentalism and feminism.

On the other side, Mumford suggests that there are two types of technological process, monotechnics and polytechnics. Whereas the former creates global, top-down, single-purpose technologies, polytechnics conceives technology for users across different socio-political contexts – and it’s the latter that Taaki believes can bring about change.

“We believe in building technology on a human scale, for humans to employ in many different contexts to solve problems that they face,” Taaki told CoinDesk, adding:

“The technology needs to be targeted for socio-political change, not just to find like the perfect mechanism to make people comfortable, for convenience, to make people happy.”

Exhausted ideas

Not only the fears of bitcoin becoming just another fun fad, but Taaki also believes what’s missing from the first and largest cryptocurrency is this idea of polytechnics.

According to Taaki, bitcoin’s failure came from the belief that the technology itself was sufficient to enact a global reorganization of power, and by simply inserting it into systems, human freedom would increase.

“Everybody thought that bitcoin would come as this huge inevitability,” he told CoinDesk. “You saw this also, people talking about the honey badger, the honey badger can’t be stopped, there’s a sense of inevitability or linear historical trajectory.”

However, that vision failed, in part due to an inability for bitcoiners to propagate the political concepts inherent to the technology and adopt the tooling to constantly evolve with the landscape.

“Technology is the means, or the instrument of power that we use for shaping the society, but we are fundamentally the drivers of that technology,” Taaki asserted.

In this way, Taaki’s central tenet maintains that without ideological purpose, technologies cannot survive.

“The problems with bitcoin are in no way technical, they are deeply social and economic problems,” he said, adding:

“The ideas behind bitcoin have exhausted their potentiality to be able to advance that project forward.”

And this seems to stem, according to Taaki, from the prevalence of the “engineering mindset.”

“There is an elite inside bitcoin. They have a very particular way of seeing the world, and that viewpoint of the world, which sees things in a very technical way … in some cases can be extremely limiting,” Taaki said.

He gave the example of the lightning network, which while it solves a much needed technical problem — scalability — it cannot solve the wider societal issues surrounding the cryptocurrency’s lack of adoption. At the same time, corporations and central banks are co-opting the technology, developing more usable products and overtaking the cryptocurrency community.

“Unless there is a fundamental correction in the course of events that we’re heading into now, that is what is going to happen,” Taaki warned.

And that’s a large part of the work he is trying to achieve with Autonomous Polytechnics.

Where’s the money?

At the time of writing, Taaki and the earliest enlisted members of the revolution are squatting at the historic home of the Cooperativa Integral Catalana, a cooperative that spawned a cryptocurrency of its own, FairCoin.

But the plans for their very own academy are laid out.

It’ll be located at the base of Carmel Hill, stretching across 8,600 square feet, containing a shared workspace, living quarters, a garden and if they have enough money, a basement that can host conferences, hackathons and other events.

Taaki has even designed a special flag for the academy, in the colors of the organization, green and black, with a blazing sun, as a symbol of technology, in the center.

And with that, there’s no shortage of interest from potential participants in the program, many of which are currently living with Taaki and told CoinDesk they’re excited to begin. But still, they wait.

“It’s been almost a year now, and we’re still waiting to get started,” Taaki told CoinDesk.

Part of this stems from the construction of the building, which is slow going, but another thing stands in the way too — a lack of funding.

Taaki is looking for $10,000 to $20,000 – merely a drop in the bucket compared to the huge amounts of money being raised by sometimes suspicious initial coin offerings (ICOs) – however, many investors have been unwilling to donate without the promise of something in return.

But the academy’s plans are to create free technology, and even its business arm would merely be a mechanism for funneling excess profits into the support of democratic confederalism around the world.

“Right now to get established we’re trying to get donations which is kind of difficult because despite rhetoric a lot of people in this crypto space are very stingy,” Taaki said.

At the moment, the project is being sustained through donations from Cody Wilson, the co-creator of Dark Wallet and the infamous creator of the 3D printable Liberator pistol.

But Taaki would like to diversify those donation streams, and at this point, he’s running out of options.

Laughing, Taaki concluded:

“Dude, at this point, I would take money from African dictators.”

Amir Taaki with Dark Wallet logo via CoinDesk.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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UK Financial Regulator Advises Banks on How to Manage Risks of ‘Crypto Assets’

The UK’s Financial Conduct Authority (FCA) has issued guidance for banks on how to handle the risks associated with “crypto assets”, according to a letter posted on the FCA’s website June 11.

Per the statement issued by Executive Directors of Supervision Jonathan Davidson and Megan Butler, banks should apply a highly individual approach to clients dealing with crypto assets since “the risk associated with different business relationships in a single broad category can vary.” The statement continues:

“Following a risk-based approach does not mean banks should approach all clients operating in these activities in the same way. Instead, we expect banks to recognise that the risk associated with different business relationships in a single broad category can vary, and to manage those risks appropriately.”

Thus, the regulatory body has suggested a number of “good practice” measures to be carried out by banks in order to avoid the risks of customers using cryptocurrencies for “criminal purposes.” The FCA encouraged banks to develop staff awareness of “crypto assets” to help them identify its risks, and to engage with crypto-dealing clients to understand the nature of their business, among others.

In the statement, the financial regulator also stressed the non-criminal motives for using cryptocurrencies, including funding “innovative technological development” and high-risk “speculative investments.” However, taking into account the globality and anonymity of crypto, the FCA suggested a couple of “high-risk” indicators, such as clients using a state-issued cryptocurrency and possessing large amounts of initial coin offering (ICO) tokens.

The FCA explained that the risk of using a state-sponsored cryptocurrency is that it is “designed to evade international financial sanctions.” Considering the risks associated with ICOs, the regulator stated that this kind of practice involves a “heightened risk of falling victim to investment fraud.”

In late December 2017, when Bitcoin (BTC) was hitting record prices, the FCA warned investors about the risks of losing all their money, claiming that Bitcoin is a bubble, and an “odd” commodity, citing its scarcity.

In April, the Central Bank of Kenya (CBK) issued a similar warning to the banks in the country, warning them against providing services to crypto dealers. CBK Governor Patrick Njoroge said, “There are risks associated with cryptocurrency particularly on consumer protection, fraud, hacking and loss of data and they are prone to be used as pyramid scheme.”

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Hacked Crypto Exchange Coincheck Confirms Removal of Four Anonymity-Focused Altcoins

Recently hacked Japanese crypto exchange Coincheck will end trading for four privacy-oriented cryptocurrencies, Monero (XMR), Zcash (ZEC), Dash (DASH), and Augur (REP), Cointelegraph Japan reported May 18.

Following reports from back in March, the exchange has now officially confirmed the removal of the four anonymity-focused coins will come into effect June 18. According to Coincheck’s blog, the exchange will remove the four cryptocurrencies to comply with counter-terrorist financing (CFT) and anti-money laundering (AML) measures recently issued by Japan’s financial regulator, the Financial Services Agency (FSA).

The FSA has been especially active in regulating domestic crypto exchanges, specifically around customer protection, since Coincheck lost $532 mln in NEM in  a major hack in January of this year.

As part of its efforts, the FSA has stated that local, officially registered exchanges will face restrictions on the trading of privacy-focused altcoins, since they are more difficult to trace than cryptocurrencies like Bitcoin (BTC).

As Friday’s official statement from the exchange says, the targeted cryptocurrencies will be sold at market price and converted to Japanese yen.

Earlier this week, Monex Inc, the company that recently acquired Coincheck, revealed plans to expand the exchange to the U.S., claiming that the U.S. and Europe are more advanced than Japan in terms of regulatory clarity and “attracting institutional investors” to crypto.

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EU Approves AML Legislation Targeting Anonymity In Crypto Market, Local Sources Report

The European Union approved new anti-money laundering (AML) legislation in part targeting in cryptocurrency today, May 14, local news outlets report.

According to Spanish news outlet La Vanguardia, today the 28-member bloc formally ratified the new legislation, which the European Parliament had approved last month. The new rules will reportedly be published in the Official Journal of the EU and the member states will have 18 months to transfer them into their national legislation.

Authorities are specifically targeting anonymity in the use of cryptocurrencies, such as Bitcoin, along with the use of consumer banking products, such as prepaid cards.

Once it comes into effect, entities such as cryptocurrency exchanges will have to abide by AML guidelines, which will likely include full customer verification, according to the content of the package passed in April.

Cointelegraph reported at the time of the Parliament approval that “threats to our citizens and the financial sector” formed the major impetus behind the overwhelming support for the laws.

“This legislation helps address the threats to our citizens and the financial sector by allowing greater access to the information about the people behind firms and by tightening rules regulating virtual currencies and anonymous prepaid cards,” MEP Krišjānis Kariņš said in an accompanying press release.

While the impact on the cryptocurrency sphere in countries governed by EU statutes will become clear later, just last week, two exchanges themselves lobbied for regulations to become more set in stone.

Eric Demuth, CEO of Austrian platform BitPanda, said formalization of as much of the industry as possible would let operators “know where they stand.”

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How Anonymous Is the Purchase of Crypto? Regulations, Practice, Risks

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.

In a worldwide environment where privacy is constantly under threat, purchase of cryptocurrencies is not an exception. In the early stage of this market, as the number of users and exchanges was not significant, the formalities around the identification of the users were not widespread. However, over the course of the years, the situation changed.

Criticisms on the anonymity of many Bitcoin users and the perceived risk that cryptocurrencies were used as a way of money laundering or for other illicit activities, increased the attention of international regulators.

Is crypto anonymous?

During the latest AMA (Ask me anything) meeting, when Bill Gates was asked for his general thoughts on cryptocurrencies, he responded:

“The main feature of cryptocurrencies is their anonymity. I don’t think this is a good thing. The [government’s] ability to find money laundering and tax evasion and terrorist funding is a good thing.”

On the other side, Edward Snowden talking about Zcash (cryptocurrency aimed at using cryptography to provide enhanced privacy for its users), defined it as “the most interesting Bitcoin alternative,” adding:

”Bitcoin is great, but if it’s not private, it’s not safe.”

The proliferation of cryptocurrencies and their constant increase in negotiation volumes has increased the attention of different national and international authorities. As of 31 December 2015, the daily volume of cryptocurrencies trading was $46 mln, whereas during the same day of 2017 this arrived at $12,136 mln (hence representing a 26,283 percent increase)

Total Market Capitalization

Image source: Coinmarketcap

Regulations – Government initiatives

United States

In the US exchange platforms have to comply with the Anti-money Laundering (ALA) and Know your customer (KYC) regulations. The ALA/KYC regulations are intended to strengthen the measures to prevent, detect, and prosecute money laundering and the financing of terrorism and require the subjected entities, to establish written customer identification programs, with the aim of:

  • obtaining customer identifying information from each customer prior to account opening
  • verifying the identity of each customer, within a reasonable time before or after account opening
  • making and maintaining a record of information obtained during identity
  • verification
  • determining within a reasonable time after account opening or earlier whether a customer appears on any list of known or suspected terrorist organizations designated by US Treasury

European Union

In the EU exchange platforms have to comply with the international standards issued by the Financial Action Task Force (FATF), then complemented by national rules. The FATF framework prohibits the subjected entities, from keeping anonymous accounts or accounts in fictitious names. These institutions should be required to undertake customer due diligence measures when:

  • establishing business relations
  • carrying out occasional transactions above the applicable designated threshold (USD/EUR 15,000)
  • there is a suspicion of money laundering or terrorist financing
  • the financial institution has doubts about the veracity or adequacy of previously obtained customer identification data


As many Asian countries are part of the FATF, the established framework also applies to them. South Korea, representing one of the world’s biggest Bitcoin exchanges where cryptocurrencies have gained popularity among national investors along the course of the years, has recently banned anonymous trading of cryptocurrencies and requires the subjected entities to verify their customers properly.

A government official of Japan said on March 13, the country will urge its G20 counterparts at the March meeting to beef up efforts to prevent cryptocurrencies from being used for money laundering. The meeting then set a firm deadline to July for providing recommendations on how to regulate cryptocurrencies globally.

Implementation of the regulations

The implementation of these regulations have also been encouraged by the International Monetary Fund, whose head Christine Lagarde recognizes the potential of the Blockchain technology and praises the work of FATF as “useful guidance to countries on how to deal with cryptocurrencies and other electronic assets.”

Today, exchange platforms all around the world have to put in place procedures in order to be compliant with ALA/KYC regulations, hence requiring new clients to go through an identity verification process.

Coinbase, a digital currency wallet and platform where merchants and consumers can transact with new digital currencies like Bitcoin, Ethereum, and Litecoin, requires new clients to go through an identity verification process.

In some instances, different stages of verifications are required, based on the services used by the clients. Kraken a San Francisco-based company, founded in 2011, requires different stages of verifications, that change based on the services used by the clients. The steps go from Tier 0, where the client can look around but can’t deposit, withdraw or make any trades, and where only the email address is required, to Tier 4 where the clients are required to upload a valid Government ID, a recent proof of residence, a signed application form and KYC documents.

Trading anonymously still possible

Despite the efforts of regulators anonymous trading is still possible, mainly through:

1) peer to peer trading platforms that allow users to trade Bitcoins for traditional currencies through person-to-person trades.

For example, Localbitcoins is a platform where users post advertisements where they state exchange rate and payment methods for buying or selling Bitcoins. An interested buyer replies to these advertisements and agrees to meet the person to buy Bitcoins with cash, or trade directly with online banking.

2) decentralized exchanges built into Bitcoin wallets that help to arrange local trades between buyers and sellers. For example, Mycelium Local Trader help arrange the trade between buyers and sellers, manage the transaction, and calculate reputation ratings based on the trades.

These platforms don’t require ID verification or any personal information besides an email address to sign up.

In addition to online platforms, Bitcoin ATMs allow a person to exchange Bitcoins and cash. Some Bitcoin ATMs offer bi-directional functionality enabling both the purchase of Bitcoin as well as the redemption of Bitcoin for cash. Another functionality is the possibility to send cash-to-cash payments to other people resident in different countries by using two Bitcoin ATMs. The diffusion of these machines is today very capillary as they can be found in more than 65 countries, in the main important cities.

Risks and correlation between ease of purchase and anonymity

Anonymous trading comes at risks. The first one could be related to the use of cash for settling the transactions through peer-to-peer platforms. The direct exchange of cash between unknown buyers and sellers poses security risks, which the feedback system of the users only partially mitigated.

The second risk is related to scams. The absence of a central entity that functions as a market settler, may not guarantee the two parties that the transactions will be successfully finalized. LocalBitcoins has a forum dedicated to this issue where suspected users are constantly signaled to the community.

The third risk could be connected the tightening of the regulatory framework around the cryptocurrencies. On Feb. 23, the Financial Action Task Force announced that it “will step up its efforts in the understanding of the misuse and risk of virtual currencies.” After that, on March 7, the SEC required that platforms trading digital assets to register with the agency.

Decentralized regulation

As the trading of cryptocurrencies is still at an initial stage, the rules around identifications of the users are not uniforms and some countries are stricter than others. The US and the EU are front-lining the regulatory environment, requiring the exchange platforms to be compliant with the AML/KYC regulations.  

Peer-to-peer transactions and the use of ATM services still allow, with some risks, interested users to transact without disclosing their personal information.

International prosecutors are also catching up the cryptocurrency environment. As Ryan Schoen, senior financial services policy analyst at Washington Analysis said:

“I think the next step here will likely be subpoenas to exchanges if they haven’t already started.”

As a result, in the short term, it could be expected that national and international authorities would strengthen further the regulatory framework around exchange platforms and cryptocurrencies trading.

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'Anonymous Sources’: Telegram Launches ‘Secret’ Second Presale, $850 Mln To Be Raised

Encrypted messenger service Telegram is reportedly raising a further $850 mln in a “secret second presale” of its TON token before launching the yet to be officially announced world’s biggest ICO.

As Verge reports citing “exclusive” reports from four anonymous sources, Pavel Durov’s platform is attempting to get accredited investors on board to double the $850 mln it already received in the ‘first’ presale.

In total, Telegram stands to raise around $1.6 bln before its TON token sale becomes publicly available.

The figures mean this ICO easily beats any other token offering in terms of USD value, with Block.One’s $700 mln result from 2017 coming a lonely second.

Telegram’s path to capital has already seen difficulties due to its increasingly prominent public profile. Fake ‘versions’ of the ICO which appeared on social media following the original announcement in January managed to illicitly accrue funds for TON tokens that did not yet exist.

Controversy centered even on documentation, with a white paper for TON attracting mixed reviews regarding its authenticity when it leaked online.

Durov himself had also publicly come out warning of individual scams linked to the ICO.

Meanwhile, number-three spot Tezos also hinted last week that the nine-month stalemate over its tokens and platform would soon end, co-founder Kathleen Breitman stating a prospective launch could occur within weeks at a UCLA conference Feb. 17-18.