An Ethereum trader has boastfully shown the content of his Ethereum wallet which contained over $283 mln allegedly earned off $55 mln in just a month. This has sent jitters through regulators who worry about the effect of having these anonymous millionaires.
In an Instagram post, the trader praised the anonymous, yet transparent, nature of digital currencies before showing an image of their wallet and then explaining the 413 percent profit made in just a month.
The dangers of being the unknown
One of the key features of all cryptocurrencies is their anonymous nature, as well as their decentralized stance, but these factors, which are contrary to usual financial and legislative regulators, are raising fresh concerns.
The European Parliament is looking into regulating cryptocurrencies and their concerns have been mentioned in draft legislation. The issue of anonymity is said to be both a problem for those trying to control this decentralized currency, as well for the currencies themselves.
“The credibility of virtual currencies will not rise if they are used for criminal purposes,” the draft says. “In this context, anonymity will become more a hindrance than an asset for virtual currencies and their potential future popularity.”
It is not to say that this trader made his profits through nefarious ways, but then again, that does not mean that he didn’t. Cryptocurrencies are trying to break away from the pigeonholing they faced when they first emerged, as currencies for the dark web and illegal activities.
The most famous of the mystery mavericks that did use Bitcoin for illegal activities was Ross Ulbricht, going by the nom de guerre Dread Pirate Roberts, who was behind the infamous Silk Road.
For many, the allure of digital currency is the anonymous nature of it, and in that light, if it was taken away and regulators got their way, there would be a lot of pullback. Financial privacy has been missing in regular banking spheres for some time now as the centralized system looks to garner all relevant information tied to monetary transactions.
“One of its more important features is that you don’t have identities tied to this,” said Spencer Bogart, head of research at venture firm Blockchain Capital. “This financial privacy is an important characteristic.”
However, there is no denying that digital currencies are suffering from a sullied reputation due to cyber attacks and illegal deeds funded by things like Bitcoin.
Recent ransomware attacks have crippled civil structures such as the National Health Service in the United Kingdom. This attack demanded payment in Bitcoin for the release of sensitive data, and since there is no way to track the receiving account, the hackers remained anonymous and richer for it.