Governments see cryptocurrencies as a growing threat: Edward Snowden statement
In the current environment, it may seem that authorities in various countries are starting to take a positive attitude towards cryptocurrencies. The day before, for example, the European Parliament voted against a ban on mining coins based on the Proof-of-Work consensus algorithm, and an executive order to regulate digital assets from Joe Biden was also quite positive. However, according to former National Security Agency official Edward Snowden, the reality is quite different, and officials still see crypto as a threat. We tell you more about the situation.
It should be noted that Edward Snowden has commented quite often on what is happening in the digital asset arena, and has even joined in. This happened in April 2021, when the world-famous whistleblower sold his own NFT token for the equivalent of $5.4 million.
We checked the current data: today, Snowden's work remains sixth in the ranking of the most expensive NFT tokens in the world in the art category. It is behind the legendary creators under the pseudonyms Beeple and Pak. Under the first nickname hides artist Mike Winklemann - it is his work "EVERYDAYS: THE FIRST 5000 DAYS" was sold for the equivalent of $69.3 million at Christie's auction and became the most expensive in the history of non-exchangeable tokens.
Most expensive collectible NFT tokens
What cryptocurrencies are being criticised for
According to Edward Snowden, authorities do see crypto as a “growing threat”. Snowden voiced these findings during an interview with Filecoin Foundation head Martha Belcher at the Camp Ethereal 2022 event. However, the conversation began with a discussion of cash.
Above all, the former NSA employee described the US financial system as “very aggressive”. In addition, he questioned whether cash could really be as anonymous as is commonly believed. Here’s Edward’s rejoinder, cited by Decrypt.
When you think about the principles of the incredibly aggressive US financial network with its anti-money laundering tools and imposition of the “know your customer” principle, I find it hard to believe that if it were technically possible to obtain the serial number of every dollar note passing through the hands of authorities, they would not have done so.
In other words, Snowden admits that cash could very well be public rather than anonymous. After all, every banknote has a unique serial number. And if you know those numbers, you can track the movement of a particular note and the activity of its owners.
Snowden continues his point.
We have this assumption about the anonymity of cash, which was inherited from a time when such an approach was actually meaningful. It’s not like that now. You know about Bitcoin having a public register. So, as soon as the dollar enters the banking system, there is a private registry available to the people who do the financial oversight. So this is actually a feature closed to the public, but open to a select few, let’s say.
During the talk, the expert also mentioned the topic of cryptocurrencies. Edward noted that “Etherium suffers from the same privacy issues as Bitcoin”. He pointed out that there are companies in the digital asset industry that analyse what is happening in open source blockchains and in addition benefit financially from it. Obviously, an example of such activity is Chainalysis, which we are already familiar with.
The most famous cryptocurrencies
Despite this, Snowden still views the Bitcoin blockchain as a “level playing field”. None of his privacy complaints, he says, has made him stop seeing the potential of cryptocurrencies and decentralised technology on a large scale.
What people really don’t see is how transformational power relations are and how markedly they will change as we move from the current obsolete technologies to the decentralised technologies of the future.
That said, Snowden points to indications that, at a minimum, US authorities do see crypto as a threat. In support of this, he cited statements from President Biden’s administration in October 2021 in which they spoke of the prospect of less effective sanctions due to the popularisation of decentralised assets.
Former US NSA official Edward Snowden
That report contained the following sentence.
These technologies offer attackers the ability to store and transfer funds outside of the financial system on a collateral basis. They also empower our enemies who are trying to create new financial and payment systems to reduce the global role of the dollar.
The previous day, the topic of such use of cryptocurrencies was also raised, but experts agree that the Russian authorities will not be able to use cryptocurrencies to circumvent sanctions. That was the view of FBI chief Christopher Wray.
Cryptocurrency blockchain
In any case, Bitcoin, Etherium and other popular cryptocurrencies are indeed decentralized, so officials cannot influence the conduct of transactions in the networks of named coins. And that seems like a compelling argument for treating crypto with distrust.
We believe that the authorities may indeed see crypto as a serious threat. As we have noted, they are unable to prohibit a particular transaction if it takes place outside of centralised venues like cryptocurrency exchanges. Consequently, this raises concerns about the potential funding of various banned entities and illegal activities. Be that as it may, so far no thorough fight against digital assets has been seen on their part, but that does not mean it will continue forever.
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