In early May, a ransomware attack on Colonial Pipeline forced the company to pay hackers $5 million in cryptocurrencies. Earlier this month, the US Department of Justice announced that the FBI had successfully recovered $2.3 million of the ransom in Bitcoin (BTC).
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Those who know Bitcoin and blockchain technology closely were stunned. What might these cybercriminals be thinking?
Prominent blockchain advocate Marta Belcher says many people still do not understand that Bitcoin is not anonymous.
Rather than something too much government-traceable, Belcher says, having a truly decentralized tool for finance is essential for privacy and civil liberties.
Belcher explained that anonymity can enhance civil liberties, and also why privacy-focused cryptocurrencies are important.
However, the US government and governments around the world apply a similar level of oversight to cryptocurrencies as they do to the traditional financial system. The U.S. Department of Justice calls privacy coins “anonymous cryptocurrencies” and states that they are potentially criminal.
Belcher sees the CBDC move as something similar. So he thinks CBDCs could potentially threaten civil liberties. Hypothetically, when CBDCs are given to people as the sole financial instrument, every action can be tracked by the government.
To make people feel secure about privacy in their transactions, Belcher says governments need to be more precise and careful when regulating the new, decentralized part of finance.