By Huw Jones
LONDON, April 25 (Reuters) - Anonymity is allowing
crypto assets to finance illegal activities, a top U.S.
regulatory official said on Tuesday, posing national security
risks that must be addressed.
Christy Goldsmith Romero, a commissioner at the U.S.
Commodity Futures Trading Commission, said cryptocurrencies were
being used to finance cybercrime whose victims include
individuals, companies, hospitals and critical infrastructure.
"Fraud is a hallmark of digital asset markets, the human
toll of which may be overlooked," Romero told a City Week
conference in London, adding that it was imperative that the
lack of visibility in cryptomarkets was addressed.
"It's essential for governments and particularly the
industry to address that which makes crypto so attractive to
illicit finance, and that is the allure of anonymity," she said.
Legally compliant crypto companies should not be using
"mixers" or software tools that effectively anonymise users by
pooling and scrambling cryptocurrencies from thousands of
addresses.
"Congress is already considering new laws on addressing
anonymity and digital identity," Romero said.
Compliant crypto companies must show they have internal
controls to prevent money laundering and terrorist financing.
Last year, the U.S. imposed sanctions on virtual currency
mixer Tornado Cash, alleging it helped hackers, including from
North Korea, to launder proceeds from cyber crimes.
"It's possible for all crypto companies to distance
themselves from mixers and anonymity enhancing technology while
still providing customers financial privacy," Romero said.
(Additional reporting by Elizabeth Howcroft; Editing by
Alexander Smith)
Messaging: huw.jones.thomsonreuters.com@reuters.net))
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