Soulbound tokens power new identity solution on Celo blockchain

March 1, 2023 Coin Telegraph

Celo

Masa Finance announced its deployment on the Celo blockchain with its new “Prosperity Passport” identity solution for users.

A central focus for many in the Web3 community has been improving identity solutions available to consumers. Last year the emergence of soulbound tokens (SBT) introduced a new way for users to define themselves.

Although the SBT hype quieted over the last months, they have not disappeared off the scene. On Mar. 1, the SBT protocol Masa Finance announced that it will deploy on the carbon-negative Celo blockchain to create a new identity solution.

More than 10 million wallets active in the Celo ecosystem will be able to generate a Masa “Prosperity Passport.” This new Web3 identity solution allows users to mint a variety of SBTs related to their digital life, such as an authenticated user verification SBT, a credit score SBT, a community reputation SBT and a .celo domain name SBT.

Calanthia Mei, the co-founder of Masa Finance said nonfungible tokens (NFTs) were the first pioneers for Web3 user customization, and SBTs are the next breakthrough technology.

“Web3 has a trust issue, and SBTs represent a composable and scalable way to build a trust layer between projects and users, and users amongst each other. “

The “Prosperity Passport” solution also gives access to other utilities from Celo projects which have integrated the technology, such as micro loans and universal basic income.

Mei believes that the identity solutions provided by SBTs will help usher in the next 1 billion authentic users into Web3.

“We see SBTs as a way to build bridges for global economies, industries, and users to merge with web3 and truly usher in the new economy."

According to the announcement, the protocol already has 250,000 Masa Soulbound Identities minted, along with nearly 300,000 Masa .Soul Names minted.

At the end of 2022, MetaMask Institutional, Cobo and Gnosis DAO all teamed up to create an SBT project to bring exclusivity and identity verification to its users. Back in December, the Japanese financial firm Sumitomo Mitsui also revealed it is looking into SBTs for social reasons.

These new digital assets are thought to be a possible solution to future digital identity in the metaverse, along with digital citizenship.

While not directly mentioning digital assets, on Feb. 9, the European Union mentioned using zero-knowledge proofs for future digital IDs.

SEC leaked crypto miners’ personal information during investigation: Report

January 17, 2023 Coin Telegraph

Coin Telegraph

The financial regulator reportedly unintentionally included 650 names and email addresses in communications with blockchain firm Green as part of an investigation.

The United States Securities and Exchange Commission, or SEC, has reportedly leaked the names and email addresses of many crypto miners connected to blockchain firm Green.

According to a Jan. 17 report from the Washington Examiner, the SEC unintentionally included 650 names and email addresses in an email communication with Green as part of an investigation, leaving the blockchain’s nodes vulnerable to hacks. The financial regulator had reportedly been reaching out to Green users regarding their purchase of the firm’s products.

“The Privacy Act of 1974 [...] prohibits the disclosure without consent of information about individuals that the federal government maintains in a system of records,” said the SEC website. “If we store information about you in a system of records from which we retrieve that information by personal identifier [...] we will safeguard your information in accordance with the Privacy Act.”

Hackers have often targeted centralized crypto exchanges to obtain information about users, but alleged unintentional leaks by government officials are less common. In October, the U.S. Justice Department announced charges against two Chinese intelligence officers who allegedly bribed a double agent with Bitcoin (BTC).

The SEC has also executed several crackdowns on crypto firms in 2022 in what many critics have called the agency taking a “regulation by enforcement” approach. In December, the financial regulator added its name to the list of federal agencies behind charging former FTX chief executive officer Sam Bankman-Fried, alleging violations of the anti-fraud provisions of securities laws.

Türkiye to use blockchain-based digital identity for online public services

January 2, 2023 Coin Telegraph

Coin Telegraph

Shortly after the Turkish central bank completed the first CBDC tests, Türkiye announced a blockchain-based digital identity application.

Türkiye, formerly known as Turkey, plans to use blockchain technology for online public services logins. e-Devlet, Türkiye’s digital government portal used to access a wide range of public services, will use a blockchain-based digital identity to verify Turkish citizens during login.

Cointelegraph Turkey reportedFuat Oktay, vice president of the Republic of Türkiye, announced during the Digital Türkiye 2023 event that citizens will be able to use blockchain-based digital identity to access e-wallet application, Cointelegraph Turkey reported.

Oktay called the blockchain-based application a revolution for e-government efforts, adding that online services will be more secure and accessible with blockchain. Users will be able to keep their digital information on their mobile phones.

“With the login system that will work within the scope of the e-wallet application, our citizens will be able to enter the e-Devlet with a digital identity created in the blockchain network,” the Turkish vice president said.

Türkiye has been announcing several projects powered by blockchain for several years now, but very few of them have turned into realization so far. The country’s plans for a national blockchain infrastructure date back to 2019. However, aside from some proof-of-concept projects and the central bank digital currency test executed after several delays, the fruits of blockchain-based ambitions have yet to bear.

Türkiye’s cultural hub of Konya was developing a city coin project to be used by citizens to pay for public services, but no further updates were shared with the public in the last two years.

Identity in the metaverse at risk, says former Windows architect

December 15, 2022 Coin Telegraph

Coin Telegraph

As metaverse adoption climbs and users join digital reality, they put themselves at risk of identity theft in new ways, including minors who engage in metaverse games.

The metaverse is coming for users at full speed. Companies and brands are jumping into digital reality, and according to a recent survey, consumer interest is climbing alongside all the activity.

At the same time, as more users join in on metaverse activity, the risk grows for nefarious activity in digital reality. A report from cybersecurity firm Kaspersky revealed that exploitation and abuse in the metaverse are set to rise in the next year.

Threats range from scams, to be expected with digital interactions but also avatar-related identity theft and abuse.

For a better understanding of the dangers and risks users can face stepping into digital reality, Cointelegraph spoke with Andrew Newman, CTO and co-founder of cybersecurity firm ReasonLabs and former architect of Microsoft's Windows Defender anti-malware software.

The primary concept users must understand is that metaverse identity is “likely to become users’ digital identity,” according to Newman.

“As our real-life and online identities continue to merge, the stakes for identity theft on the Metaverse will increase.”

He highlighted that avatar scams have already been reported on platforms like Roblox. The example given by Newman was that the hacker may try to convince a user that they need access to their avatar for a number of reasons, with the ultimate aim of stealing their digital identity.

Although it’s a common occurrence to have digital identity threats, as money or virtual currencies become tied to metaverse avatars, these threats will increase. Newman warns consumers as more money is spent on digital assets for these avatars.

“Just as we are protective of our physical assets, we need to make sure that people protect their digital assets and personal information within the Metaverse.”

The amount and various types of digital assets with real value that users can own is endlessly expanding. This incites that cyber crimes and theft will only become more complex and digital reality expands.

There is a lot of promise in blockchain and emerging technologies for transparency and security. However Newman says users need to be vigilant nonetheless.

“We shouldn’t assume that our funds are not susceptible to theft simply because they are in the Metaverse rather than in a traditional banking network.”

Another component to identity theft in the metaverse is that minors are susceptible to such threats. In many ways, the metaverse is designed to engage both youth and young adults.

Minecraft, Fortnite, and Roblox all have attracted young user bases. Often, minors don’t grasp the importance of cybersecurity or their digital footprint. Newman said, there are already existing threats minors face in online digital worlds. However:

“Finances might shift over time from virtual in-game currency and items, to more traditional finances such as real money or crypto ties to newer “web3” identities in games.”

This would create more value to be exploited from unsuspecting minors.

Currently many major Web3 developers such as Chainlink, are developing new security protocols for users in digital reality. Developers both inside and outside of the industry are looking to create a global metaverse policy to troubleshoot a list of growing concerns.

MetaMask Institutional, Cobo and Gnosis DAO team up for soulbound token project

December 13, 2022 Coin Telegraph

Coin Telegraph

A new soulbound NFT project from Cobo, MetaMask Institutional and Gnosis Safe is bringing new nonfungible exclusivity and proof of identity to users.

Soulbound tokens (SBTs) are becoming a mainstay in the Web3 space for users and projects to define themselves in digital reality.

A Dec. 13 announcement from Cobo, a digital asset custodian and blockchain technology developer, revealed a new SBT project which unites crypto industry giants to cater to users’ developing digital identities.

Cobo, MetaMask Institutional and Gnosis DAO teamed up to create “Evolution,” an SBT project, a tool to help users define themselves in digital reality and stay up to date on industry trends.

A spokesperson for Cobo told Cointelegraph that since SBTs cannot be sold on the market, it helps create a bridge between Web2 and Web3 surrounding user identity.

“This provides assurance to the token provider and allows them to give exclusive access and benefits to their targeted users by giving them an identity."

While SBTs may be the new trend to mark a digital persona, they will not replace nonfungible tokens (NFTs) and the inherent utilities that come with tradable assets.

However, according to the Cobo spokesperson, SBTs may be increasingly used to create another level of exclusivity not achievable by a standard NFT. Using the “Evolution” collection as an example, holders will receive exclusive quarterly research on the decentralized finance space unavailable to those outside their SBT community.

“Although the tokens can be used to identify and reward certain users, they can also be used to limit and exclude users from certain projects or benefits.

From a perspective of brands or wallets, SBTs may “dissuade users from changing wallets or rotating keys for security purposes,” says the Cobo representative

This development from major Web3 players comes as the space shifts with the development and introduction of SBTs.

These new digital assets are now being looked at as a potential key to the metaverse of the future, in which users have citizenship as a part of their digital identity.

Recently in Japan, the financial giant Sumitomo Mitsui announced it is experimenting with SBTs to help meet local social needs.

Crypto Exchange Bybit to Add New Restrictions for Unverified Users, Update Withdrawal Limits

December 12, 2022 Bitcoin.com

Crypto scammers are using black market identities to avoid detection: CertiK

November 18, 2022 Coin Telegraph

Black Market

The blockchain security firm has uncovered a new tactic used by crypto scammers as the industry continues to improve its fraud detection capabilities.

Crypto scammers have been accessing a “cheap and easy” black market of individuals willing to put their name and face on fraudulent projects — all for the low price of $8, blockchain security firm CertiK has uncovered.

These individuals, described by CertiK as “Professional KYC actors” would, in some cases, voluntarily become the verified face of a crypto project, gaining trust in the crypto community prior to an “insider hack or exit scam.”

Other uses of these KYC actors include using their identities to open up bank or exchange accounts on behalf of the bad actors.

According to a Nov. 17 blog post, CertiK analysts were able to find over 20 underground marketplaces hosted on Telegram, Discord, mobile apps, and gig websites to recruit KYC actors for as low as $8 for simple “gigs” like passing the KYC requirements “to open a bank or exchange account from a developing country.”

Pricier jobs involve the KYC actor putting their face and name on a fraudulent project. CertiK noted that most actors are seemingly exploited as they are based in developing countries “with an above-average concentration in South-East Asia” and paid around $20 or $30 per role.

Meanwhile, more complex requirements or verification processes could fetch an even higher asking price, particularly if the KYC actors are residents of countries considered a low money laundering risk.

Some roles paid up to $500 a week if an actor was to play the role of CEO for a malicious project but the KYC actor market was “marginal” compared to the market for already KYCed bank and crypto exchange accounts according to CertiK.

Crypto to fiat — or vice-versa — conversions were also cited as a significant percentage of the transactions seen on these marketplaces with CertiK calculating that more than 500,000 members in marketplace sizes ranging from 4,000 to 300,000 were buyers and sellers on these black markets.

CertiK warned that over 40 websites claiming to vet crypto projects and offer “KYC badges” are “worthless” as the services are “too superficial to detect fraud or simply too amateur to detect insider threats.”

They added the teams behind these websites are “missing the needed “investigation methodology, training, and experience” meaning these badges are then leveraged by scammers to mislead the community and investors.

That being said, the industry has been working hard and is gaining ground in its fight against crypto scammers. A tool released in October by traditional finance giant Mastercard combines artificial intelligence and blockchain data to help find and prevent fraud.

Contrary to popular belief, the open nature of blockchain transactions means it’s harder for fraudsters to hide the movement of funds. Another recent example has been the work of French authorities using on-chain analysis to find and charge five people who stole nonfungible tokens (NFT) through a phishing scam.

Are decentralized digital identities the future or just a niche use case?

September 28, 2022 Coin Telegraph

Coin Telegraph

Are decentralized digital identities the future or are they a niche use case for blockchain technology doomed to solely be used by crypto natives?

As users take advantage of online services and explore the internet, they eventually create a digital identity. This type of identity is then tied to central entities like Google and Facebook, which make it easier to share data with new services through simple sign-in buttons.

While these digital identity management systems are convenient, they are relying on centralized intermediaries that hold and control user data. Personal identifiers and attestations are in their hands, and they can decide — or be forced — to share this information with other parties.

Blockchains offer a solution: decentralized digital identities. These allow individuals to manage information related to their identities, create identifiers, control who they’re shared with and hold attestations without relying on a central authority, like a government agency.

A decentralized identifier for a decentralized identity can take the form of an Ethereum account. Users can create as many accounts as they want on the Ethereum network without anyone’s permission and without anything being stored in a central registry. Credentials on the Ethereum blockchain are easily verifiable and tamper-proof, making them extremely trustworthy.

Other use cases are out there. In August 2022, Binance catapulted the decentralized identity debate to social media platforms after moving to launch its first soulbound token, BAB, serving as users’ Know Your Customer (KYC) credentials.

Whether decentralized identities are the future of online activity remains to be seen.

Managing decentralized identities

Speaking to Cointelegraph, Witek Radomski, chief technology officer and co-founder of nonfungible token ecosystem Enjin, revealed he sees a future in which the metaverse will see a “blend of social media networks, email, crypto wallet addresses, and decentralized applications,” suggesting there will be a mix of digital and decentralized identities.

Per Radomski, the key to identity management will be the “preservation and protection of sensitive information,” as different networks have “distinct technical methods to track digital ownership of data.”

Recent: Vietnam’s crypto adoption: Factors driving growth in Southeast Asia

Radomski added that individuals entrusting protocols with their personal data should consider that big business decisions will be made based on an enterprise’s needs and philosophy, adding:

“The ownership of digital assets mimics asset possession in the physical world. Assuming that owners are operating within the bounds of the law, blockchain-enabled digital ownership cannot be interfered with by the government.”

He added that decentralized identities will play a role in preserving individuality, which will “depend on proving that you’re not a bot” and will have online activity as one of the “most compelling testaments to demonstrate this.”

The potential of decentralized identities

Managing digital identities is a challenge, as one mistake can easily lead to a breach of personal information. Centralized entities have been known targets, with a recent case seeing the personal data of Portugal’s president stolen in a cyberattack. The use of decentralized identities eliminates this risk, as only the users are responsible for their data.

Speaking to Cointelegraph, Dmitry Suhamera, co-founder of IDNTTY — a decentralized public infrastructure layer enabling a decentralized identity approach — said that centralized digital identity providers “compete with each other, which actually hinders widespread adoption,” as in the end, “the user needs an ID for government services, an ID to interact with a bank, an ID to work with a cooperation.”

Real-world use cases have seen digital identity programs’ adoption slow down shortly after launching, with Suhamera using Gov.UK Verify in the United Kingdom, which saw less than 10% of the population signing up, as an example. Nigeria’s adoption of eID, Suhamera added, stalled in 2017 amid issues with public-private partnerships used to launch the program.

Per Suhamera, centralized digital identity solutions tend to “be quite expensive and offer an inconvenient monetization model” as users have to buy and pay for national IDs before using them digitally.

Cross-border uses of digital IDs are also complex, Suhamera added, as corporations and regulators have to line up bureaucracy, which can be a slow process. Suhamera added:

“Decentralized ID allows for the creation of a distributed ‘cheap,’ easy to integrate repository of personal ID (for which only the user is responsible) with which any service can integrate, from KYC providers and digital signatures to any online or identity services.”

While decentralized identity can make identifiable information more portable while keeping it safe, centralized entities managing digital IDs “tend to provide a set of services at once,” boosting user experience.

Decentralized identities have a number of use cases, including the potential for universal logins across a number of applications without the use of passwords. Service providers can issue attestation tokens granting users access to their platforms after a single sign-up, for example.

Binance’s soulbound token shows that user authentication and KYC is also a possibility on the blockchain through the use of non-transferable tokens. Because these tokens aren’t transferable, voting through the blockchain without manipulation is a real possibility.

Security concerns

While decentralized identity management does appear to have significant advantages, the technology does not come without its drawbacks. For one, self-sovereignty means it may not be the most user-friendly approach.

Speaking to Cointelegraph, Charlotte Wells, communications manager at crypto platform Wirex, said digital identities have been around for some time, although blockchain-based digital identities will “be a game-changer in the future web 3 due to their decentralized nature.”

Wells pointed out that the amount of user data stored online is steadily growing, creating “huge security concerns over how this data will be stored and who will have access to it.” She pointed to data breaches at Facebook, which exposed the data of millions of its users. Per her words, decentralized digital identities will be “vital in allowing us to have ownership and control over our credentials.” Wells commented:

“Self-sovereign identities use blockchain technology and zero-knowledge proofs to store digital identities on non-custodial wallets – the biggest advantage being that users have complete control over this and decide what companies, apps and individuals have access to this data.”

She added that there are drawbacks: One important role of centralized entities is “enforcing standards of regulation, giving users and businesses the reassurance they need to work on the web.” Without these central authorities, Wells concluded, there may not be the same level of protection for decentralized identities.

Zero-knowledge proofs are a way of proving the validity of a set of data without revealing the data itself. This technology, paired with decentralized identities, could mean users can prove who they are while under pseudonyms, ensuring their security isn’t affected.

Recent: Institutional crypto custody: How banks are housing digital assets

To Fabrice Cheng, co-founder and CEO of Quadrata, blockchain-based digital identities are going to change the concept of digital IDs and create new use cases for the Web3 space. Speaking to Cointelegraph, Cheng noted that it is still important to be mindful of what’s shared, noting that people should “be aware o their behaviors on the blockchain.”

With the Ethereum blockchain acting as a global directory for decentralized identities of users who choose what they share and are in control of their data, it’s hard to imagine a scenario in which crypto-native users wouldn’t prefer this alternative. Non-crypto native users, however, may prefer to keep using centralized providers and share their data, at least until the user experience becomes as simple.

Payments platform Fuse integrates ChromePay to bring DID services to Africa

September 20, 2022 Coin Telegraph

Africa

The African continent has emerged as a hotbed for crypto and blockchain activity, with countries like Nigeria and Ethiopia leading the way.

Web3 payments platform Fuse has partnered with ChromePay, an identity-based payment solution, to launch a new suite of payment products in Africa — a move designed to boost financial inclusion on the continent.

The partnership centers around ChromePay’s decentralized identity service, also known as a DID, which the companies claim will enable millions of Africans to participate in the Web3 economy. By utilizing the Fuse blockchain, ChromePay will offer users a variety of Web3 payment services powered by its DID solution. As part of the partnership, Fuse has also awarded ChromePay a grant for an undisclosed amount to build out its decentralized finance (DeFi) and DID services directly on the blockchain.

By integrating with the Fuse blockchain, ChromePay will reportedly enable users to access both traditional and blockchain-based payments directly from their mobile devices.

Founded in 2019, ChromePay launched its payment solutions app in Nigeria in 2021 following a successful pilot. The company’s next milestone is the launch of its Fuse-powered DID in Ethiopia, a country that has made notable strides in its crypto adoption.

Crypto is booming in Africa!

A new report reveals venture funding for African cryptocurrency startups grew 11x in 2022.

(Reporting via @ezrareguerra) https://t.co/aJwcPQSr9V
— Cointelegraph (@Cointelegraph) May 23, 2022

As Cointelegraph explains, decentralized identity is an emerging concept within Web3 that enables trusted data exchange. In practice, DIDs allow users to manage and administer their digital identity without reliance on a centralized third party.

Africa has become a hotbed for crypto and blockchain activity, with significant populations in Kenya, Nigeria and South Africa turning to digital assets for access to financial services. This trend was identified by the United Nations in a June 2022 policy brief, which described the “unprecedented pace” of crypto adoption during the pandemic.

Enhanced KYC checks can be a win-win for crypto exchanges and consumers — here’s why

September 20, 2022 Coin Telegraph

Coin Telegraph

Adopting more stringent Know Your Customer (KYC) checks can give crypto exchanges a competitive edge over those that meet minimal standards.

Crypto is a fast-moving sector where new trends — decentralized finance and nonfungible tokens among them — accelerate in the blink of an eye. And as demand for digital assets grows, the need for regulation grows too.

Anticipating those regulations and having the systems in place for future compliance can position crypto exchanges as industry leaders. Those that do the bare minimum risk falling behind as customers turn to more trusted options.

Exchanges, though, can adopt a substantial role in setting the regulatory tone by taking the initiative to go beyond compliance and better protect their users. That can help a business build a reputation for security and deliver a compelling point of difference from the competition. More than that, it can show regulators how policies can work in practice.

The business case

Prioritizing adaptable, futureproof solutions can make it easier for exchanges to expand quickly into new markets. It can help them control operating costs, reduce risks and enhance the customer experience.

Beyond helping crypto exchanges achieve compliance, identity verification technology that draws from hundreds of global data sources can accelerate onboarding, offering the right balance between security and friction. Onboarding customers quickly and safely can give exchanges the competitive edge they need in a market that gets more crowded with every crypto bull run.

Trulioo, an identity verification service that enables exchanges worldwide to quickly and securely onboard customers, is helping crypto platforms achieve their full potential in a constantly shifting market.

Fast, accurate digital identity verification can help exchanges build trust and safety while quickly expanding their customer base, the company says. Enhanced Know Your Customer (KYC) checks can help exchanges scale more quickly. By knowing exactly who their customers are and establishing the provenance of funds, exchanges can position themselves to adapt to future regulation changes.

"Regulation is a hot topic in the crypto space and one of the reasons we’re seeing so many crypto exchanges looking to partner with us," Trulioo CEO Steve Munford told Cointelegraph. "Working with a platform such as Trulioo can help exchanges stay ahead of the curve and remain compliant while preparing for tighter regulations that might be on the horizon."

How does enhanced KYC work?

Conventional KYC measures can limit the number of people an exchange can verify, especially if it requires a passport, driver's license or bank account. By contrast, Trulioo offers validation in more than 195 countries and against more than 400 reliable data sources — including mobile networks, credit bureaus, banks, governments and business registers. It's also possible to authenticate new users with the help of a selfie.

Trulioo recently acquired the no-code orchestration solution HelloFlow to accelerate digital onboarding and unveiled major product updates that include document-free proof of address verification. In another significant development, company executives said they achieved unicorn status after a $394 million Series D funding round.

Trulioo wants to help exchanges navigate the choppy waters of regulation now and in the future with fast, secure and accurate KYC and Anti-Money Laundering crypto checks.

That approach can help crypto businesses bolster their infrastructure to ensure they're ready when the next bull run brings a new wave of customers to exchanges.

Learn more about Trulioo

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice.

Identity

Managing decentralized identities

The potential of decentralized identities

Security concerns

The business case

How does enhanced KYC work?

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