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Are Bitcoin transactions anonymous and traceable?

Bitcoin transactions are easily traceable through blockchain explorers but do not directly reveal the identities behind Bitcoin wallet addresses.

Should I share my Bitcoin address publicly?

It is not a problem to share public keys, but make sure the private key cannot be found by third parties. Transactions can be sent to the public key, which is completely secure.

It is safe to share your Bitcoin address publicly. This way, it is possible to safely complete donations or payments. No cryptocurrencies can be stolen through a public address. The only way by which stealing crypto is possible is if someone has managed to get hold of the private keys.

Bitcoin wallets always make a difference between public keys and private keys. A public key can be compared to your email address. Anyone can send emails to it, but only the owner of the email address can read them. With a cryptocurrency address, this is no different since others can use this address to send crypto, and the owner of the address is the only one who can use the digital asset.

The private key is the password to enter the wallet. It is important that this unique code is kept in an offline place where no one can access it. Sharing personal data, such as the private keys and the wallet password, with others can cause the wallet in question to be emptied. Therefore, only share the public key if necessary and keep the other codes in a safe place.

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Can you have an anonymous Bitcoin wallet?

Anonymous Bitcoin wallets exist, but be careful while handling them. You can reveal your identity, which defeats the purpose of the wallet.

It is certainly possible to have an anonymous Bitcoin wallet. However, a wallet alone is not enough to ensure this anonymity. When someone makes several transactions, an identity can be linked to a wallet where this information is known. Due to the tightened KYC rules for exchanges, it seems to be increasingly challenging to conduct transactions in a completely anonymous way.

Nevertheless, there are Bitcoin wallets that allow you to operate completely anonymously. The Electrum wallet is an example of this, which can also be integrated with a hardware wallet. Before making the choice to use an anonymous wallet, it is useful to first consider how Bitcoin will get on this wallet. When BTC is sent from an exchange with KYC, the anonymity is already gone.

What are the challenges in tracking a Bitcoin address?

It can be difficult to track Bitcoin transactions when people use various wallets and Bitcoin mixers. These factors disrupt the search process and take up a lot of time.

Despite the fact that it is challenging for users of a Bitcoin wallet to conduct transactions completely anonymously, there are several ways to get close to anonymity. For example, it is possible to use a cryptocurrency mixer.

In this case, it is a Bitcoin mixer, which ensures that it is more difficult to make Bitcoin traceable. This is done by mixing BTC transactions from different people together in a pool, then sending the transactions to the intended addresses.

In addition, wallets can also be very difficult to monitor. If someone does not want their activities on the Bitcoin network to be traceable, it is possible to create a sort of smoke screen. By creating many crypto wallets and carrying out various transactions between these wallets, it can be more difficult for anyone to trace transactions and wallets.

Both challenges are difficult on their own, but combining them can make tracking Bitcoin addresses a lot more difficult. Tracking transactions and wallets will take an enormous amount of time and energy.

Can you search for a Bitcoin wallet address?

It is possible to search for a Bitcoin wallet address through a Bitcoin explorer. However, finding a crypto address does not mean that you also know the identity behind it.

When you don’t have any identifying information that goes with the Bitcoin wallet, it’s hard to search. Through a blockchain explorer, it is easy to find transactions and addresses, but it can take a lot of time to find out the identity behind a wallet address.

Because someone’s wallet address does not have to be anonymous but can be hard to find, a Bitcoin wallet address is called a pseudonym, an alias, which is different from someone’s actual name. The data is not linked to an identity, but it is still possible to trace someone’s identity or a pseudonym.

How are Bitcoin transactions traced?

With increasing legislation and surveillance, governments can trace fraudulent BTC transactions more easily by finding the identity behind a Bitcoin wallet address.

In recent years, millions in cryptocurrencies have been seized by various governments worldwide. Criminals saw the opportunities that blockchain technology has to offer and tried to buy cryptocurrencies such as Bitcoin as anonymously as possible.

Ultimately, this did not work out well for many fraudsters and it can be stated that Bitcoin transactions are not fully anonymous. These events have helped to tighten legislation in this area and intensify the search for fraudulent transactions.

When trading from Bitcoin wallets whose identity is not known, transactions can be traced quickly, but it can take time to find out the identity. When someone wants to exchange their cryptocurrencies for United States dollars, it already becomes a lot easier to trace the identity of the wallet owner and trace back the transactions.

What makes Bitcoin traceable?

Bitcoin transactions are traceable because Bitcoin’s blockchain is completely transparent and every transaction is publicly stored on a distributed ledger.

Since 2013, various studies have been looking into tracking Bitcoin transactions and their associated identities. Although it is possible to create a certain form of anonymity with cryptocurrencies, it is difficult to send transactions completely anonymously via the Bitcoin blockchain. Blockchains remain fully open and accessible to everyone.

Thanks to the transparency of the blockchain, it is possible to easily track money flows. If the identity behind a wallet address is known, then the transactions made can be traced back and traced in the future. All these transactions can be viewed in detail. In this way, it is possible to see which amount was sent, but also on which date and to which wallet.

Can you trace a Bitcoin transaction?

Through blockchain explorers, one can easily track Bitcoin transactions, but it is becoming increasingly difficult to conduct Bitcoin transactions anonymously.

It is certainly possible to trace a Bitcoin (BTC) transaction. Bitcoin explorers allow you to map activity on the Bitcoin blockchain. Thanks to this transparency, transactions are traceable and you can think of the blockchain as a kind of open database full of Bitcoin transactions.

Other cryptocurrencies like Ether (ETH) and Solana (SOL) also have their own blockchain explorers called Etherscan and SolScan. In all these explorers, you can find information about the transactions on the blockchain, such as how much crypto was sent and which addresses were involved in the transaction. Despite the transparency of the blockchain, many people think that you can still make Bitcoin transactions anonymously.

However, more and more countries are implementing Know Your Customer (KYC) rules, which require you to reveal your identity on centralized trading platforms. By disclosing your identity, it becomes a lot easier for the government to discover what transactions you have carried out and to see what is in your Bitcoin wallet.

To be able to trade on a central exchange, personal data will have to be supplied to the exchange. Bitcoin addresses can therefore be linked to personal data. Since the data of previous Bitcoin transactions is not deleted, it is always possible to view past transactions.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Crypto Community Responds to Tornado Cash Sanctions, Privacy Advocates Say ‘There Are Many Legitimate Reasons to Seek Financial Anonymity’

Crypto Community Responds to Tornado Cash Sanctions, Privacy Advocates Say ‘There Are Many Legitimate Reasons to Seek Financial Anonymity’The U.S. government banning the ethereum mixing service Tornado Cash and the enforcement that has followed has the crypto community in an uproar about the event. A large number of crypto and privacy advocates have spoken out against the actions the government has taken so far, and the nonprofit advocacy group Fight for the Future […]

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Official explains why China CBDC should not be as anonymous as cash

While cash is associated with more anonymity, it’s still less mobile and easy to use in large amounts than a digital currency, China’s CBDC project lead Mu Changchun said.

China’s central bank digital currency (CBDC) should not be as anonymous as cash, the head of the People’s Bank of China (PBoC) digital currency institute declared.

Digital yuan project lead Mu Changchun spoke of China’s CBDC project at the 5th Digital China Construction Summit on July 24, local financial publication Sina Finance reported.

Since debuting the digital yuan in 2020, the Chinese central bank has never targeted complete anonymity for the project, Mu said at the event. Instead, PBoC has been working to enable only limited anonymity in compliance with global Anti-Money Laundering (AML) regulations, the official stated.

The Chinese authorities should be able to access CBDC data on people suspected of crimes, Mu noted. According to the official, partial anonymity is an important feature of the digital yuan project though, as it guarantees transaction privacy and personal information protection.

However, a completely anonymous CBDC would interfere with preventing crimes like money laundering, terrorism financing, tax evasion and others, he added.

While cash is associated with more anonymity, it’s less mobile and easy to use in large amounts than a digital currency, Mu emphasized. “The inconvenient nature of carrying cash increases friction for money laundering and terrorism financing. Therefore, the tolerance for the anonymity of cash is relatively low,” the official stated, adding:

“The central bank’s digital currency is more portable. If it provides the same anonymity as cash, it will greatly facilitate illegal transactions such as money laundering. Therefore, the central bank’s digital currency should not have the same anonymity as cash.”

Mu went on to say that regulators risk encountering “serious consequences” if they choose to only focus on privacy protection and ignore the risks associated with financial crimes. “Freedom without constraints is not true freedom,” he added.

Despite rejecting anonymous online financial transactions, PBoC has still been working to ensure the privacy of the digital yuan. According to PBoC governor Yi Gang, the digital yuan has ambitions to be more privacy-enhanced than payment apps.

Related: China’s BSN chair calls Bitcoin Ponzi, stablecoins ‘fine if regulated’

The problem of user privacy has emerged as one of the biggest issues associated with CBDC projects worldwide. Regulators became puzzled about how to preserve digital privacy while also tracking transactions to prevent illicit financial activity.

In May, the European Central Bank (ECB) suggested that “CBDC with anonymity” was preferable to traditional digital payments like bank deposits in another working paper related to the digital euro. The proposal came shortly after the ECB admitted that digital euro designs lacked privacy options.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Controversial mixer Tornado Cash open-sources UI code

The privacy-focused mixer has been at the center of several DeFi exploits over the past year as users attempted to obfuscate the trail of stolen funds.

Popular cryptocurrency mixer Tornado Cash has fully open-sourced its user interface (UI) code — a move its developers say fulfills their mandate of complete decentralization and transparency. 

Tornado Cash Classic UI became fully open-sourced on Thursday, the protocol’s anonymous developers announced in a Medium blog post. Although the protocol’s UI has been decentralized since 2020, its open sourcing means anyone can analyze Toronado Cash’s UI pools and make pull requests to improve the project. In the software development world, a pull request is when a developer is ready to merge new code changes with the project's main repository.

Technically, Tornado Cash’s open-sourcing allows anyone to fork the repository and modify the code as they see fit.

“We personally grew fond of the black & green floating astronaut associated with the protocol," the developers said, referring to the current website interface. “However, you should know our credo by now: We will always lean towards more decentralization. As far as we are concerned, our DAO took a step further with this great progress.”

A DAO, or decentralized autonomous organization, is an internet-native organization collectively managed by its members with no central authority or leadership. Tornado Cash first announced its DAO in mid-2020.

Tornado Cash's total value locked peaked north of $1.1 billion in October 2021. Source: DeFi Llama.

Tornado Cash currently has over $300 million in total value locked, or TVL, according to DeFi Llama. This figure was closer to $850 million in November 2021 when the project announced the launch of its layer-2 scaling network on Arbitrum.

Related: Crypto privacy is in greater jeopardy than ever before — Here's why

The Tornado Cash protocol has been at the center of several decentralized finance exploits, including the $375 million wormhole attack in February and the more recent $100 million Horizon Bridge hack. As a mixer, Tornado Cash allows cryptocurrency users to obfuscate transaction trails. Currently, the protocol supports mixing a maximum of 100 Ether (ETH) at a time.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Anonymous culture in crypto may be losing its relevance

Although anonymous teams have built some of the leading infrastructure in crypto, many new participants in the ecosystem are using their real identities.

Crypto has inherited many values that were popularized in the early days of the internet. 

Many participants in the crypto space have been anonymous since the beginning of Bitcoin (BTC), since using this digital money offers a certain degree of anonymity so long as nobody knows the public address of the user. The true identity of its creator, Satoshi Nakamoto, remains unknown to this day.

The most recent wave of innovation spearheaded by decentralized finance (DeFi) and nonfungible token (NFT) projects have anonymous teams that maintain their general right to remain unknown.

The founder of DeFi analytics dashboard DefiLlama, anonymous person 0xngmi, released a bug bounty on his identity. Rather than giving out this quest to find vulnerabilities in the DefiLlama code, he offered 1 Ether (ETH) to whoever could reveal his identity with a detailed explanation of how they found out. No one has managed to reveal his identity at the time of writing.

0xngmi has also been educating people that would like to become anonymous with a guide on “How to stay anon,” which is a collaborative document that allows contributors to add and edit to improve it.

Navigating through Crypto Twitter, there are plenty of pseudonymous “celebrities” that, based solely on the reputations they have built, have a digital persona with a substantial amount of followers.

Another account that remains anonymous on Twitter, The DeFi Edge, tweeted the reasons why he has decided for the account to remain anonymous. The founder of the eponymous DeFi analysis site has no intention to reveal their identity for the time being, but has dropped some minor details:

As the industry rebrands to Web3 and a wide array of talent is being lured into the ecosystem, a greater number of participants in the space have decided to take a different approach. They are in the position to later reveal different characteristics of their physical persona to become pseudonymous or reveal their true identity altogether. 

After the recent Terra collapse, the BBC reported that a man presented himself at Do Kwon's home in Seoul only to find his wife answering the door. The 30-year-old founder of Terra has been active on Crypto Twitter, using his real identity to promote his protocol and communicate with the community in these times of crisis. Having his identity open to the public might have helped him convey trust to investors and the community, but it also exposed him to threats in real life. Situations like these are some of the reasons why many entrepreneurs in the space remain anonymous.

Related: How Terra’s collapse will impact future stablecoin regulations

In a constant struggle between the open flow of information and retaining the privacy of the individual, protecting anonymity and avoiding getting doxxed has become an important issue of the new cultural and technological revolution taking place in online society.

One of the biggest controversial identity reveals was when journalist Kate Notopoulos authored an article titled “We found the real names of Bored Ape Yacht Club’s pseudonymous founders,” in which she uncovered the identities through publicly available records associated with Yuga Labs.

Protestors in Guy Fawkes masks. In the internet age the mask has become a symbol associated with anonymity and privacy.

Revealing an identity ≠ doxxing

Usually referenced as a hostile action via the internet, doxxing is meant to insinuate the ability to find a person and reveal private information about an individual or organization. Although the term was coined by extreme groups as a way to threaten and intimidate marginalized persons online, the word doxxing currently blends into the meaning of revealing an identity without exclusive extremist connotations. 

Recently, 0xngmi gathered some findings that linked Charlotte Fang as the person behind the anonymous account Miya. The founder of the NFT art project Milady Maker allegedly used this pseudonymous online profile to spread hate speech toward minorities through social media.

After being recognized as the person behind the pseudonymous account allegedly linked to an online cult, Charlotte had to step down from the project as Milady Maker’s floor price plummeted.

Anonymous teams handling fortunes

Decentralized autonomous organizations (DAOs) have opened the door for many participants to be able to contribute to the governance of a project while remaining anonymous. Either for safety reasons or to avoid regulation, the majority of these projects have anonymous founders and contributors. This has been the norm in recent years. 

Grug, a pseudonymous account on Twitter, told Cointelegraph his reasons for remaining anonymous as CapitalGrug and the value of being judged solely on performance and ideas:

“I think the main reason that I chose to be anonymous is so that I can participate in and help maintain the same type of irreverent culture that I found so cool about crypto from the start.”

Plenty of good actors in the space have remained anonymous, bringing value to projects and communities by not having other defining characteristics influence people’s perceptions of that persona.

Being anonymous can also be the path for people that need a fresh start, but this can also have the effect of allowing malicious actors to infiltrate the space.

Back in January, the true identity of 0xSifu, founder of Defi protocol Wonderland, was unveiled as Michael Patryn, the co-founder of now-defunct crypto exchange QuadrigaCX.

The co-founder of the scandal-ridden exchange had previously been sentenced to 18 months in a United States federal prison for identity theft related to credit card fraud. Patryn is not even his real name; following the prison term and previous to founding QuadrigaCX, he reportedly changed his name from Omar Dhanani.

Recent: Crypto’s youngest investors hold firm against headwinds — and headlines

The Wonderland protocol collapsed with this news and the debate of whether anonymous teams should be allowed to handle large sums of money took the center stage. Even Danielle Sesta, co-founder of Wonderland, said that he expects anonymous teams to lose relevance in favor of teams that have their full identity revealed.

Redefining anonymous identity 

Although with the transition toward transparency in crypto in recent years, anonymous culture is still very strong. One doesn’t have to remain completely anonymous in the space, as Grug shared: 

“Our fund is all anon for instance, although we have all doxxed to one another. When I go to events and people whip out their phone to follow me on Twitter they are usually anonymous.”

Identity, whether it's public or anonymous, is a very delicate subject that we all struggle with. Finding the balance between fully anonymous and a public identity will be the key to a more rich and diverse crypto community.

Up to this point, anonymous culture in crypto has proved to bring some positive value, as it minimizes biases and allows individuals to fully express themselves. Bad actors can take advantage of this to pursue a fresh start, which can be dangerous if they keep acting maliciously. But, if they become healthy contributors to an ecosystem and provide value to the community, it could prove people deserve a second chance.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

ECB lays out ‘anonymous’ digital euro as public opposes ‘slavecoins’

The ECB drops another working paper on the digital euro, causing more outrage from Europeans opposing a central bank digital currency.

The ECB released another working paper on the digital euro, providing an extensive technical analysis of a potential European CBDC and its position in the existing financial system.

Issued on May 13, the working paper aims to study issues like financial intermediation, payment choices and privacy in the digital economy, providing a large number of related algebra-based conclusions.

The study suggests that a “CBDC with anonymity” is preferable to traditional digital payments like bank deposits but it “may become supplanted” by digital currencies or “payment tokens” issued by technology giants.

“This risk would be particularly tangible if those platforms compete with banks in the market for financial services. However, an optionality for data sharing features may result in a widespread CBDC adoption,” the working paper reads.

According to the ECB, one of the main problems of cash is that it cannot be used for more efficient online transitions while it still preserves anonymity. In contrast, bank deposits can be used online but do not provide enough anonymity.

Finally, digital currencies issued by tech platforms “allow merchants to hide from banks but enable platforms to stifle competition,” the ECB wrote, adding:

The European Central Bank (ECB) continues pushing its central bank digital currency (CBDC) project despite Europeans apparently not feeling too much positive about a digital euro.

“An independent digital payment instrument — a CBDC — that allows agents to share their payment data with selected parties can overcome all frictions [...] The introduction of a CBDC with anonymity enables merchants to prevent banks from extracting information from payment flows.”

While the ECB keeps promoting a potential digital euro with anonymity-enabled features, the Europeans are not quite optimistic about any CBDC. According to public feedback from another digital euro consultation, the majority of Europeans are against the adoption of a CBDC in the European Union.

Launched on April 5, the consultation has amassed 14,110 feedback entries at the time of writing, with many opposing the very idea of a central bank-controlled digital currency and associated lack of user privacy. Some online commentators even referred to a CBDC as a “slavecoin,” opposing “digital slavery” potentially introduced by such financial instruments.

“The digital euro in the sense of the EU referral is not compatible with either the protection of privacy or with data protection regulations. [...] A control system for the small guarantors requires,” Austrian citizen Schmidl Andreas wrote.

“I'm totally against the introduction of a digital euro because I don't want to be dependent on the internet when I buy something. I strictly reject the digital euro, because it leads to total control and restricts our fundamental rights and freedoms,” another anonymous user wrote.

As previously reported by Cointelegraph, the question of user privacy has emerged as one of the biggest problems associated with central bank digital currencies. This quickly became a big problem for global regulators and governments as they need to prevent illicit financial activity while also preserving confidentiality.

According to a previous digital euro public consultation released in April 2021, user privacy was considered the most important feature of a digital euro by both citizens and professionals in the European Union.

Related: Proposed digital euro designs lack privacy options, ECB presentation shows

There are a number of other problems associated with a digital euro, including the alleged lack of demand. Jonas Gross, chairman of the Digital Euro Association, told Cointelegraph in April the primary aim of the digital euro is still not clear. Last year, regulatory executive Pablo Urbiola at Spanish bank BBVA argued that it was not exactly clear what kind of customer demand the digital euro was supposed to meet.

According to European Commission finance chief Mairead McGuinness, the ECB still expects a prototype CBDC sometime in late-2023.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Proposed digital euro designs lack privacy options, ECB presentation shows

Transactions via the EU’s prospective CBDC could be transparent to intermediaries, as any non-crypto digital transactions are.

Next to the fears of government overreach that the European Union’s ambitious digital euro project stirred, the main concern of the public is the prospective currency’s privacy framework. It appears that this worry might not be overblown after all: as the European Central Bank's (ECB) latest presentation hints, user anonymity is not a desirable design option.

On May 3, crypto venture advisor and European digital asset regulation whistleblower Patrick Hansen drew public attention to the ECB’s presentation titled “Digital Euro Privacy options”. The document is relatively short and contains 9 slides that lay out the possible options for user privacy in the EU’s Central Bank Digital Currency (CBDC), also known as the digital euro.

Acknowledging the public concern for the CBDC’s privacy, the presentation stresses the need to assess the issue “in the context of other EU policy objectives, notably anti-money laundering and countering the financing of terrorism (AML/CFT).”

What this bureaucratic verbiage means in practice is that the baseline privacy scenario for the digital euro project is all transaction data being transparent to intermediaries such as banks. The option of providing a higher degree of privacy for low-value transactions is still on the table, though, and “could be investigated with co-legislators.”

However, the overall mood of the document can be expressed in a single quote from slide 4, which goes: “User anonymity is not a desirable feature.” As Hansen concludes, at this point it isn’t clear how exactly the digital euro would differ from the existing fiat-based infrastructure for digital payments.

The public feedback section for the digital euro contains more than 13,000 replies by the press time, mostly critical to the CBDC project. Meanwhile, the ECB and Eurosystem have began experimental prototyping of digital euro customer interface at the end of April.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Anti-war Russians start donating crypto to support Ukraine

Crypto could be one of few ways for Russians to help Ukrainians as any identified assistance to Ukraine is considered as high treason by the Russian state.

While the West is growing increasingly concerned over Russia’s potential use of cryptocurrencies to evade sanctions, some Russians are using their Bitcoin (BTC) to help Ukrainian people.

Pavel Muntyan, a renowned Russian animation producer and creator of the animated web series “Mr. Freeman,” has called on anti-war Russians to support Ukrainian citizens amid Russia’s ongoing military attack on the country.

Muntyan took to Twitter on Tuesday to announce the opening of a cryptocurrency donation address for Russians who want to support Ukrainian people anonymously as Russia has banned its citizens from helping people in Ukraine.

On Feb. 27, Russia’s General Prosecutor’s Office officially warned that any assistance to Ukrainians amid Russia’s “special operation” in the country would be considered high treason, with Russians risking being jailed for up to 20 years.

As such, Muntyan is now urging Russians to provide financial support to those who have suffered from operations of Russia’s military. Using his crypto address, Russians can now donate in any tokens on blockchains like the Binance Smart Chain, Polygon, Ethereum, HECO and Avalanche without disclosing their identity, he wrote:

“Now you can help Ukraine and do it anonymously. With the help of crypto. All the money will be used to provide Ukrainian civilians with essential goods, as well as to support the families of soldiers of the Ukrainian army.”

He stressed that raised funds only target help to innocent people and do not intend to be used to support any military operations. 

At the time of writing, the donation address holds about $1,500 in Ether (ETH) and about $350,000 in Tether (USDT) stablecoin.

The Ukrainian government alongside several crypto companies have established multiple cryptocurrency donation channels to support Ukrainian people amid Russia's military invasion in the country. As of Monday, the amount of public crypto donations sent to the Ukrainian government, military and charities was nearing $40 million.

Mr. Freeman is a fictional character in Muntyan’s eponymous animation series that is known for promoting principles of freedom as well as criticizing the lifestyle of modern everyman. The series has over 1.5 million subscribers on YouTube, viewed over 150 million times at the time of writing.

Muntyan has been deeply into the crypto industry before, introducing his own cryptocurrency in collaboration with Free TON, one of crypto initiatives that spun out from Telegram’s original Telegram Open Network project. He's also into nonfungible tokens (NFT), launching several NFT drops on platforms like OpenSea.

Apart from involvement in crypto, Muntyan is known for supporting opponents of Russia's President Vladimir Putin.

Related: Experts reject concerns Russia will use crypto to bypass sanctions: ‘Totally unfounded’

The latest news comes amid the West getting increasingly concerned over Russians moving into crypto to evade massive sanctions against Russian companies and ordinary Russian people.

France’s finance minister declared on Wednesday that the European Union is working to address Russia’s potential use of cryptocurrencies to evade sanctions imposed on it following its operations in Ukraine. Previously, the United States Treasury Department warned the U.S.-based companies and individuals not to handle crypto transactions sent to certain Russian nationals and banks.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Buzzfeed’s Bored Ape NFT dox: Danger to crypto or journalistic integrity?

As the identities of more and more pseudonymous crypto personalities continue to get outed, experts weigh in on the value of anonymity.

From the very beginning, individuals making use of pseudonymous identities to protect their privacy has been an integral part of the crypto sector, however, with the market having matured a lot since the early days, the question of these practices still being morally sound has once again come to the forefront, especially in relation to projects that have achieved a certain amount of mainstream clout.

In this regard, American media and entertainment firm Buzzfeed recently outed the identities of two of Bored Ape Yacht Club’s (BAYC) four founders — i.e., “Gordon Goner” and “Gargamel” — as Greg Solano and Wylie Aronow. 

To elaborate, journalist Kate Notopoulos recently authored an article titled We Found The Real Names Of Bored Ape Yacht Club’s Pseudonymous Founders in which she uncovered the pair’s names by going through publicly available records associated with Yuga Labs, the company behind the collection. Yuga was incorporated in Delaware with an address associated with Solano, while other records point to Aronow.

On the same day as the reveal, Yuga Labs indicated that its NFT collection was in funding talks with one of Silicon Valley’s top VC firms, a16z, with the firm valuing the entire collection at a handsome $5 billion.

Following the “doxing” — an informal term referring to the publishing of private information about a particular individual on the internet — both Solano and Aronow took to Twitter to highlight the importance of individual privacy, especially within the context of Web3 vs. Web2.

Is doxing ever ethical?

According to Notopoulos, when a business as big as BAYC — i.e., one attracting billions of dollars annually — is operating on a global scale, it is imperative that the company’s founders or CEO use their real name and not a pseudonym, adding:

“There are reasons why in the traditional business world, the CEO or founder of a company uses their real name and not a pseudonym. How do you hold them accountable if you don’t know who they are?”

To further strengthen her case, she added that executives associated with publicly traded companies in the United States are required by the Securities and Exchange Commission to fill out several disclosures and reports while smaller firms are subject to intense banking regulations as well as Know Your Customer laws requiring all executives to use their real names.

That said, the apparent “non-consensual exposure” of BAYC’s founders has brought to the forefront a number of criticisms, especially from those individuals operating within the burgeoning Web3 ecosystem. For example, prominent crypto podcaster Colbie referred to the article as journalistic “trash” meant simply to attract clicks with Messari founder Ryan Selkis echoing a somewhat similar sentiment. 

However, amid all this backlash, Notopoulos seemed to remain relatively unfazed, claiming that she did what she needed to do both from an ethical as well as journalistic standpoint. 

The experts are divided 

Giselle Nagle, operations head for PhotoChromic, a blockchain-based digital identity protocol, told Cointelegraph that the issue of identity protection is highly complex/multifaceted and one that is notoriously difficult to solve, adding:

“To distill it down, there are two main aspects to your identity — personal and public. Pseudonymous identity works best when you need to trust that the individual behind the identity is who they say they are and when sensitive information is being exchanged. However, in both cases, the individual should have full autonomy over whether or not to expose their identity.”

She added that a person’s identity is their greatest asset and that it is a must that everyone — especially those individuals operating within the realm of digital tech — know how to place mechanisms to protect their information. “For the first time since the advent of the internet we are starting to see the pieces of the puzzle come together to unlock the huge potential of a holistic view of your own identity,“ Nagle opined.

Similarly, Jaya Klara Brekke, chief strategy officer at privacy tech startup Nym Technologies, told Cointelegraph that Buzzfeed’s aforementioned move was extremely shady and as a result, it is becoming increasingly important to have stronger privacy protections in place — especially as the industry continues to mature. 

In Brekke’s view, individual pseudonyms are no longer enough, adding that with tools allowing for the analysis of public ledgers, traffic and metadata now easily available on the open market, issues relating to privacy are more problematic. She said:

“We are quickly headed towards a bigger privacy problem than ever. Which, in turn, feed into discriminatory profiling and identity systems, blocking open access to technological resources. We need technology that remains neutral, open and available to all.”

A somewhat contrary opinion was shared by Lior Lamesh, co-founder and CEO for GK8, a cybersecurity fin-tech, who told Cointelegraph that blockchain, by its very nature, is private and that as long as the organization running a blockchain initiative can govern its operations according to the law of the land, it has the right to keep the identities of its users and stakeholders private.

Lamesh also stated that journalists are truth-seekers by nature and therefore have the right to do their jobs and in this case, Notopoulos revealing the identities of BAYC’s founders was fine:

“This should not be interpreted as a cause for concern. What can be said now is that these digital arts will almost certainly not be used as a conduit for money laundering because the BAYC team will implement new data protection methods. So, in terms of a chance to do the right thing, we can't say the Buzzfeed journalist's move is out of place.”

The doxing trend may continue to gain traction

It is worth mentioning that Solano and Aronow aren’t the first big names in the crypto space who have been publicly outed this year as earlier in 2022, “0xSifu,” the pseudonymous treasury manager for controversial Avalanche-based protocol Wonderland Money, was revealed to be former convict as well as co-founder of the now-defunct cryptocurrency exchange QuadrigaCX, Michael Patryn.

Patryn’s criminal past has made major waves within the global crypto landscape back in 2019, when QuadrigaCX’s operator Gerald Cotten — who was working closely with Patryn — died under mysterious circumstances, taking $169 million worth of investor’s crypto with him. 

Following the scandal, it was unveiled that Patryn’s real name was Omar Dhanani, an indicted criminal who was forced to spend a total of 18 months in a U.S. federal prison on identity theft charges more than a decade and a half ago. Following his release, Dhanani changed his name to Michael Patryn and subsequently became associated with the crypto space, launching QuadrigaCX and more recently joining the Wonderland team. 

Therefore, as we head into a future where crypto companies continue to become more and more accepted within the mainstream, it will be interesting to see how much longer the pseudonymous operators of various platforms will be able to keep their identities private.

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years

Head of Investigative Committee Calls for Mandatory Identification of Cryptocurrency Users in Russia

Head of Investigative Committee Calls for Mandatory Identification of Cryptocurrency Users in RussiaRussians who use cryptocurrency should not be anonymous, the man who chairs Russia’s federal investigating authority has recently stated. The official leading efforts to fight corruption in the government called for additional regulations, including the introduction of mandatory identification for those who transact with digital coins. Anti-Corruption Official Pushes for Rules to Mitigate Risks of […]

SWIFT Plans to Launch CBDC Interconnection System in Next Two Years