According to this banking report, governments have it all wrong. Bitcoin is one of the least private assets out there, and they would have to change policies to swing the pendulum the other way. According to banking experts, instead of protecting them, governments have been harming their citizens with the current draconian measures. This seems convenient for bitcoiners, sure, but this banking insider looks like the real deal.
He or she, on condition of anonymity, wrote an essay for The Bitcoin Policy Institute. It begins with: “Financial privacy, and more specifically the requirement to obtain informed consent before the collection and use of another’s personal financial information, is central to individual liberty.” From there, go to Mordor and back. Is banking insider on to something? Or is the banking insider just toeing the bitcoiner party line? Let’s examine what she or he said and find out.
But first, we must not separate this paragraph from the opening lines. It accompanies and complements them.
“Due to the dual threats of exponentially increasing cybercrime and increased government surveillance and scrutiny of financial transactions, individual financial privacy is and has been under attack on multiple fronts, and the true costs are beginning to manifest itself in a remarkable way”.
This is a very important topic and the world should discuss it thoroughly as soon as possible. This banking insider is doing governments a favor by explaining how privacy works in bitcoin. The trial is also said to be a pre-emptive strike against possible Tornado Cash-like sanctions against the bitcoin network.
About the Author/The Banking Insider
Normally, we wouldn’t interrupt the flow of the article with author information, but this time it’s important. If readers don’t believe in banking insider information, they won’t take their words of wisdom seriously. This person knows what’s up.
“The author is choosing to remain anonymous to protect their identity and the company they work for. They have worked at a number of publicly traded financial institutions in the fraud prevention and mitigation space; from tactics from ground level to business strategy and policy.”
They also worked on “identity verification” and are involved in KYC and AML “compliance and reporting”. Banking insiders currently work at a bank, helping them “prevent fraud and comply with existing regulatory guidelines on customer identity”. His warning to governments and citizens is as chilling as it needs to be.
“As someone who has seen identity theft disrupt the lives of countless victims, I know how important financial privacy is to protecting consumers from the scammers and criminal networks that have proliferated over the past 15 years. Global fraud losses are estimated to be 6.4% of global GDP, with a staggering $5.38 trillion in 2021. Experts cite the protection and security of personal financial information as one of the most important steps a person can take to mitigate these threats.”
And since we’re giving credit where it’s due, The Bitcoin Policy Institute defines itself as “a non-partisan, non-profit organization researching the political and social implications of Bitcoin and emerging monetary networks.”
BTC price chart for 09/22/2022 on FX | Source: BTC/USD on TradingView.com
The Banking Insider on privacy
According to the banking insider, “Cash offers the highest level of privacy.” Second, we have credit card companies or banks, ie “third parties to transact on our behalf”. With these, there is “a relatively high level of privacy” because these companies are “legally required not to disclose our transaction information to others without our consent.”
You know who’s in third place, “because Bitcoin is an open public ledger, a user’s transaction history is publicly available to everyone.” The transparency of the bitcoin network means that “anyone can see all past transactions that are linked to holdings in that wallet address, and in many cases, how much Bitcoin is in the wallet!”
This brings us to prevention. In case lawmakers are thinking of directing a Tornado Cash-like attack on bitcoin:
“Bitcoin users who don’t want to share their entire transaction history or net worth when transacting with a merchant can use collaborative transaction tools to put their financial privacy on par with their other payment methods . These tools provide a service similar to what Visa provides to its users today; they protect transaction details from both the counterparty to the transaction and outside observers.”
It’s not just that collaborative transactions aren’t a crime. They are absolutely necessary for the system to provide privacy.
“These collaborative transaction tools demonstrate a clear benefit to end users, but are viewed suspiciously by policymakers and financial institutions that are enabling crypto exchanges and services, as these tools are also conceptually attractive to criminals who want to try to “break the chain” of “visibility about the sources of their funds”.
In the end, the banking insider says only that bitcoin users deserve “the same level of financial privacy that Americans are legally entitled to for day-to-day transactions, regardless of how those individuals choose to pay or get paid.” And that the system is different enough to merit a new set of rules. And that this is not a trivial matter.
“As Bitcoin users grow through regulated exchanges, lawmakers must ensure that their financial privacy is protected at the same level as all other regulated payment methods. If this is not addressed soon, the global threat that assume today fraud will only accelerate.”
Remember, “experts cite protecting and securing personal financial information as one of the most important actions a person can take to mitigate” privacy threats.
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