U.S. Senators and FBI May Not Be Against Privacy-Focused Crypto, Says Railgun Researcher
Summary:
Alan Scott Jr., a researcher for Railgun, suggests that U.S. senators and intelligence agencies may not be as antagonistic to privacy-centric crypto protocols as believed. This comes after his discussions with several senators and the FBI, which did not reveal an imminent crackdown on crypto privacy. However, the recent arrest of the founders of Samourai Wallet on money laundering charges demonstrates the ongoing scrutiny of crypto privacy. Furthermore, Scott maintains that banning crypto privacy would be a massive blow, resulting in a real-time monitoring system.
Alan Scott Jr., a proponent and investigator for Railgun, suggests that U.S. senators and intelligence bodies might not be as antagonistic towards crypto platforms with an emphasis on privacy as previously thought. Scott, who was a speaker at ETH Global in Sydney on May 2, stated that his interactions with senators and the FBI gave no inkling of an imminent crackdown on crypto privacy. He believes that several government higher-ups are not only intelligent, but also genuinely want to do what’s best for the public.
Railgun is a privacy-centric protocol that utilizes smart contracts to ensure transaction confidentiality for Ethereum users in decentralized finance (DeFi), and its Layer 2 networks such as Polygon and Arbitrum. However, Railgun has often been associated with other crypto privacy protocols such as Tornado Cash, which has faced law enforcement scrutiny in the past.
Recently, an X-account claiming to represent Railgun denied allegations of its service being used for laundering crypto obtained illegally by North Korea and entities under U.S sanctions. This was in response to an FBI report that implicated Railgun in washing over $60 million in Ether (ETH) during the 2022 Harmony bridge exploit. Railgun countered, insisting on its zk-proof tech and "Private Proofs of Innocence" measures as safeguards against misuse.
Scott noted that the FBI, being an extensive organization, is more focused on individuals intending to commit financial crimes. The apprehension is about the potential hindrance to their efforts in nabbing these culprits. He also stated that his dialogues with U.S. politicians and regulators seemed largely constructive, with a genuine willingness to comprehend the burgeoning crypto industry.
However, the arrest of the founders of Samourai Wallet, a crypto mixer and Bitcoin wallet, on money laundering accusations by the Department of Justice (DOJ), underscored the persistent scrutiny of crypto privacy. The DOJ claimed the platform processed $2 billion in unlawful transactions and abetted $100 million in money laundering transactions. Still, Scott maintained there's no apparent campaign against the general notion of privacy in crypto, adding that if crypto privacy were outlawed, it would be hugely regrettable and tantamount to creating a real-time surveillance mechanism.
Published At
5/3/2024 5:58:46 AM
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