Tens of thousands of people are receiving data breach alerts as two US banks disclose security lapses to their customers. According to new filings with the Office of the Maine Attorney General, USAA Bank and the Bank of Clarke are now alerting customers involved. USAA Bank says a “system error that occurred during a routine […]
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A North Carolina-based bank is facing a proposed class-action lawsuit over a data breach that has allegedly placed customers at serious risk of fraud and identity theft. The plaintiff of the lawsuit accuses Truist Bank of failing to secure and safeguard its customers’ sensitive information properly, following a security incident that exposed confidential data of […]
The post Billion-Dollar Bank Exposes Customers’ Full Names, Account Numbers, Dates of Birth and More in ‘Foreseeable and Preventable’ Data Breach: Class-Action Allegations appeared first on The Daily Hodl.
Banks in Pakistan plan to launch an electronic platform for know-your-customer procedures that will be operating on a national level. The blockchain-based system will allow them to exchange the personal information of customers through what they describe as a decentralized and self-regulated network. Banks of Pakistan Looking to Employ Blockchain for KYC Checks Pakistan Banks’ […]
Uniswap newly released privacy policy comes in light of the FTX crisis, an event that has shined a spotlight on the need for transparency.
Decentralized exchange (DEX) Uniswap's recently updated privacy policy appears to have attracted the ire of some members of the community, with concerns that collecting and storing user data works against crypto's core values.
In recent responses to a November blog post regarding its updated privacy policy, some vocal members of the community suggested it i uncharacteristic for a decentralized entity to collect and store information about its users.
In the Nov. 11 post from Uniswap Labs, released around the time of FTX’s collapse, the decentralized exchange released its privacy policy to explain how it collected and stored user data
“With innovations around blockchain, web3 aims to reclaim users’ privacy and choice after decades of internet businesses that have eroded it.”
“That’s why we’re releasing a new Privacy Policy today – we want to be crystal clear about what data we’re protecting and how we use any data we collect. Transparency is key. We never want our users to be surprised,” it said.
This privacy policy, which was last updated on Nov. 17 reveals that the exchange collects publicly-available blockchain data, information about user devices such as browser information, and operating systems, and information about users’ interactions with its service providers, among others.
Uniswap also stated that none of this information includes personally identifiable information such as first name, last name, street address, date of birth, email address or IP address.
Despite this, some in the crypto community have shared concerns that the moves are in contrast to crypto's core values, which are focused on user privacy and anonymity.
The team behind privacy-preserving cryptocurrency Firo argued in a Nov. 21 Twitter post to its 83,700 followers that Uniswap’s privacy update sets a “dangerous precedent” for DEXs:
While we have the utmost respect in what @Uniswap has built, we strongly reject the incorporation of data collection to track user behaviour and onchain activity. This sets a dangerous precedent for DEXes. https://t.co/h4kCiQKtl7
— Firo $FIRO (@firoorg) November 21, 2022
OwenP, an affiliate for the DEX SpookySwap suggested that it was uncharacteristic for a decentralized exchange to collect and store user information on the backend.
"We were contacted [...] by an infrastructure provider once who asked about our backend and what info we kept we were shocked by the question. 'None of course' [was] the answer."
Meanwhile, Twitter user “CryptoDavid” also noted to his 12,000 Twitter followers on Nov. 21 that he wasn’t surprised by Uniswap's decision, as other DEXs have also started doing the same thing.
Related: Digital sovereignty: Reclaiming your private data in Web3
Transparency has emerged as a buzzword in the industry following the collapse of crypto exchange FTX earlier this month.
Other crypto entities that have recently pledged towards “transparency,” including implementing “proof-of-reserves” in the case of centralized exchanges, include Kraken, Bitmex, Coinfloor, Gate.io and HBTC who’ve already completed audits.
Binance, OKX, KuCoin and a host of other exchanges also plan on doing the same.
Zero-knowledge Know Your Customer (KYC) would allow businesses to adhere to strict AML/CTF rules while ensuring customer privacy.
As the Web3 industry matures, Zero-knowledge Know Your Customer (zkKYC) is becoming more widely discussed as a means to comply with strict financial regulations while maintaining user privacy, according to the partner of a venture capital firm.
In an interview with Cointelegraph, John Henderson, partner at Australian-based venture capital firm Airtree Ventures said the successful implementation of a zkKYC system would be “great news for both regulators and consumers” and could increase cryptocurrency adoption:
“Institutions and retail users are more likely to participate in DeFi if they can be confident that they are complying with their AML/CTF obligations.”
Henderson explained a zkKYC system would allow users to prove certain things about themselves to service providers without having to divulge personally identifying data such as their names or identification documents.
In theory, the sharing of that information would be enough to satisfy Anti-Money Laundering (AML) and Counter-terrorist Financing (CTF) regulatory requirements placed on the crypto industry.
“[The system] involves a trusted third party validating my personal information and then issuing a cryptographic proof to my personal wallet, which I could then choose to share, or share attributes of, with financial service providers.”
The benefit of such an approach is that no personally identifying information could be leaked in the event of a security breach of a service provider such as a crypto exchange, Henderson claims, with the identification documents only recoverable when required by authorities.
Many in the crypto community have been critical of the way their personally identifiable information has been handled by some crypto platforms.
Recently, the community shared their concerns after court documents published on Oct. 5 publicly disclosed the personal information and transaction history of thousands of Celsius customers, with some warning they could be used to “dox” users.
Calls to improve privacy for individuals were also loudly sounded at the September Converge22 conference in San Francisco.
Jeremy Allaire, CEO of stablecoin issuer Circle, expressed the need for “advancements” in technologies that prove identities and credentials while simultaneously ensuring individuals’ privacy.
Related: Are decentralized digital identities the future or just a niche use case?
Henderson however admitted that “storage of sensitive information is still an unsolved problem,” sharing two ideas on how the management of such information could take place.
“One idea would be to have trusted entities hold identity documents off-chain and port proof of identity on-chain, without the original documents. Another idea is to sign a wallet transaction with a regulatory institution, who would then register that account with an identity.”
Despite the challenge, Henderson was adamant a zkKYC protocol will form the “building blocks of on-chain reputation scores” allowing “more useful” financial products and services.
“My priority is onboarding the next hundred million users to crypto,” he said, “If we want to achieve internet scale, we need a solution for AML/CTF compliance.”
Airtree Ventures led a $4.7 million seed round into ReputationDAO on Apr. 13, a decentralized autonomous organization which aims to provide a financial reputation and identity service for decentralized finance (DeFi).
