Government Needs Tools to Unmask Crypto Investors and Reverse Transactions, Says US Lawmaker
U.S. House Representative Bill Foster says the US should work to ensure it can unmask crypto investors and reverse transactions.
Foster, a Democrat from Illinois, says in a new interview with Axios that criminals are wising up to the fact that because Bitcoin’s transaction ledger is public, BTC is not a great tool for illicit activity.
Since Bitcoin is not anonymous, Foster says the next focus should be on finding ways to reverse on-chain transactions.
“The second fundamental decision you have to make about crypto assets – not only is it truly anonymous – or is there a court that you could go to to unmask the participants, but also, is there a third party, a court that you can go to [to] reverse fraudulent or mistaken transactions?
A simple example of that is if someone drags you into an alley, puts a gun to your head, says ‘get out your cellphone and transfer all your Bitcoin to my wallet’… are you just out of luck?
Or can you go to court, have them unmask the participant and can the court, if they decide that the transaction was fraudulent, criminal or mistaken – that you can then have the court use its access to a very heavily guarded key, a cryptographic backdoor in essence, that allows them to cryptographically reverse transactions on the blockchain.”
Bitcoin transactions are not reversible and the protocol’s pseudonymous creator, Satoshi Nakamoto, left no known backdoors that would allow transactions to be undone.
The congressman, who co-chairs the House Blockchain Caucus, says he doubts his comments will be well-received in the crypto industry.
But he believes cryptocurrency holders would appreciate having a third party to turn to when they need to recover their digital assets.
“Now you’ve just heard about two things that will drive the crypto purists berserk… like the trusted third party and so on…
I think for most people, if they are going to have a big part of their net worth tied up in crypto assets, they are going to want to have that security blanket of a trusted third party that can solve the problem when they get hacked, when they get stolen from, or even a mistaken assumption.”