Authorities in the United States are launching an offensive against privacy, targeting apps that promote user privacy. This week, the arrest of the co-founders of Samouraï Wallet, accused of laundering $2 billion, and an FBI warning against certain applications that do not require KYC, mark a critical turning point.
The United States begins a battle against privacy
US authorities appear to have launched a legal battle against apps that allow users to protect their privacy. Earlier this week, the co-founders of Samouraï Wallet, a wallet equipped with a Bitcoin mixer, were arrested, accused of laundering $2 billion.
The Federal Bureau of Investigation (FBI) recently cracked down on apps that don't require identity verification (KYC), by publishing a press release to warn American citizens of the dangers that these platforms could represent.
Excerpt from the press release published by the FBI
“The FBI warns Americans against using cryptocurrency money transfer services that are not registered as money services businesses (MSBs) under United States federal law (31 USC § 5330; 31 CFR §§ 1010; 1022) and that do not comply with anti-money laundering requirements. A few simple measures can prevent the unintentional use of non-compliant services. For example, avoid cryptocurrency money transfer services that do not collect necessary customer information (KYC) when required. »
It is difficult to know precisely which applications the FBI is referring to here. Indeed, according to the law, a company is obliged to collect information from its customers only if it takes custody of their fundsas is the case of Coinbase which keeps the private keys of the wallets for their customers.
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However, many services and applications in the world of cryptocurrencies allow you to carry out operations similar to an exchange platform, but do not require identity verification (KYC), because they never take custody of the funds.
For example, there are platforms for exchanging fiat currencies for cryptocurrencies that do not require KYC. Once funds are received, they are directly exchanged and sent to a non-custodial wallet, for which only the user holds the private keyas is the case with Relai app or Mt Pelerin.
Other on-chain applications, such as Uniswap or Aave, provide infrastructure on the blockchain without ever accessing funds.
Coinbase: register on the most famous crypto exchange in the worldThis warning could be a threat to non-custodial wallets
The most surprising thing about this FBI warning is that it appears to be aimed at exchange platforms, however, those who take custody of funds and do not collect the personal information of their clients are already in an illegal situation.
For several members of the community, the warning, which came 24 hours after the arrest of the co-founders of Samouraï Wallet, seems to declare the start of an offensive by the authorities against solutions for protecting privacy on the Internet.
This approach could even, in the long term, lead to the banning of traditional cryptocurrency wallets that operate only with a seed phrase..
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It is important to remember that although some people use blockchains and their many applications to increase their privacy, using these technologies to launder money or participate in illegal activities is of little relevance due to the traceability offered by blockchains.
To put it in perspective, a study by Chainalysis reveals that, in 2023, cryptocurrencies involved in illicit activities represented $24.2 billion, while the Panama Papers scandal alone involved approximately $11.3 trillion.
Ledger: the best solution to protect your cryptocurrenciesSource: FBI
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First attracted by the lure of gain, I am now trapped deep into the rabbit hole. With no way out, I just have to share my knowledge and convey the passion I have for the world of blockchain. I am also the creator of Adopt a Block, an educational site dedicated to Bitcoin.
Marius Farashi Tasooji
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