Right from the inception of cryptocurrencies, world elites from government politicians, mainstream journalists, and even experts have condemned the privileges of anonymity and privacy most cryptocurrency users enjoy.
They say the crypto trading platform had become a hiding place for persons of questionable characters, from terrorists to drug dealers and hackers alike.
Contrary to public backlash and smear campaign, most cryptoassets are pseudonymous because transactions from its users can be linked to wallet addresses, in turn giving the government adequate information about the financial activities of the user.
Still, some digital tokens offer privacy with Monero being the most prominent, asides this mixing tools are also available for users wanting to remain anonymous to make their transactions with non-privacy coins private.
Users of these tools enjoy anonymization protocols that mix their transactions with those of other senders and receivers making it cumbersome to separate the multiple threads involved.
Protocols like CoinJoin, DarkWallet, bestmixer.io, SharedCoin, and CoinSwap make anonymity easier for crypto users not using privacy coins like Monero, Dash or Zcash.
Even with this advantage, the government hasn’t relented in tracking cryptocurrency users and their financial transactions, with the U.S. at the forefront of this campaign the U.K and the E.U have shown no signs of tolerance either.
December last year these governments jointly announced that they are planning a crack-down on crypto-enabled money laundering and tax evasion.
The U.K. economic secretary to the Treasury Stephen Barclay said;
“The UK government is currently negotiating amendments to the anti-money-laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation, which will result in these firms’ activities being overseen by competent national authorities for these areas.”
Other countries like Russia, China, and India have joined the crypto tracking mission relying heavily on input provided to them by cryptocurrency exchanges. With reassurance from these exchanges, it has become increasingly apparent that over time the government will not just pull through with its threats but also remove the anonymity of its users.
The U.S. for example in November 2016, filed a legal summons that required Coinbase to provide the Inland Revenue Service (IRS) with identities of an unspecified number of users associated with cryptocurrency wallets.