What is the importance of KYC in cryptocurrency user information security – The Financial Express

By Johnny Lyu

As the world increasingly moves towards a digital future, more and more businesses are beginning to adopt cryptocurrency as a form of payment. However, with the rise in popularity of digital currencies comes an increase in the number of scams and frauds being perpetrated against unsuspecting users. In order to protect themselves and their customers, businesses must implement effective know-your-customer (KYC) policies and procedures.

This article will try to bring the concept of KYC verification closer to you, as well as explain the benefits of KYC compliance as a whole. Lets get into it!

What is KYC?

KYC process is the process of verifying the identity of a customer or client. This can be done through the use of government-issued identification documents, such as a passport or drivers license, or by other means, such as utility bills or bank statements. The goal of KYC is to ensure that the customer or client is who they say they are, and to prevent money laundering and other illicit activities.

What Are the Benefits of KYC?

There are many benefits to crypto firms implementing KYC policies and procedures, both for businesses and customers or clients.

From a business perspective, implementing KYC processes can help crypto companies by protecting them against fraud and money laundering. This is especially important in crypto, where scams are not that rare. It can also help businesses to build trust with their customers or clients, as it shows that the business is taking steps to verify the identity of those who are using its services.

From a customer or client perspective, know-your-customer can help to protect their crypto assets against fraud. It can also make it easier for customers or clients to do business with a company, as they will not need to provide their personal information each time they interact with the company.

What Are the Risks of Not Implementing KYC?

There are several risks associated with not implementing KYC regulations in the crypto world.

Financial Crime Risk

First, crypto firms that do not verify the identity of their customers or clients run the risk of being used for money laundering or other illegal activities. This could lead to criminal charges being brought against the business, as well as reputational damage.

Scams and Fraud Risk

Second, businesses that do not verify the identity of their customers or clients run the risk of being taken advantage of by scammers and fraudsters. This could lead to financial losses for the business, as well as damage to its reputation.

Failing to Establish Trust

Third, businesses that do not verify the identity of their customers or clients may have difficulty building trust with their customers or clients. This could lead to a loss of business, as customers or clients may take their business elsewhere.

Overall, it is important for businesses to carefully consider the risks and benefits of KYC before deciding whether or not to implement such policies and procedures.

Reduced Functionality and Lower Limits

Most crypto firms entice users into completing the KYC procedure by enabling additional functionalities or increasing withdrawal limits once the procedure is complete. Therefore, if the KYC isnt complete, users may suffer from certain platform-induced limitations.

What Does KYC Mean for Crypto Exchanges?

Cryptocurrency exchanges are businesses that allow customers to buy and sell cryptocurrencies, such as Bitcoin, Ethereum, and Litecoin. In order to comply with anti-money laundering (AML) and countering-the-financing-of-terrorism (CFT) regulations, crypto exchanges must implement know-your-customer (KYC) policies and procedures.

KYC requirements do not apply to decentralized exchanges (DEXs), which organize trades through smart contracts instead of a central trading desk. Therefore, users are not required to disclose their identities. However, centralized exchanges are regarded as financial institutions, and, therefore, must comply with financial regulations if they want to conduct business in certain countries.

You Shouldnt be Afraid of KYC

Even though it may seem like a hassle, you shouldnt be afraid of KYC. It is important to remember that KYC is designed to protect you, as well as the businesses that you do business with especially when you are dealing with an industry as vulnerable as crypto. When implemented properly, KYC can help to prevent fraud and money laundering, and can also make it easier for you to do business with a company.

If you are asked to provide your personal information to a company, you should make sure that the company is legitimate and that you feel comfortable providing your information. You should also make sure that you understand how the company will use your information, and what steps they will take to protect it.

Why Does Crypto Need KYC?

Cryptocurrency exchanges, as well as other non-decentralized entities in the space, are subject to the similar AML and CFT regulations as traditional financial institutions. As such, they must take steps to prevent their services from being used for money laundering or other illegal activities.

One of the most effective ways to do this is to implement proper regulatory compliance. By collecting certain identifying information from their customers, exchanges can screen out those who may be attempting to use the exchange for illegal purposes.

In addition, KYC can help to build trust between an exchange and its customers. By showing that it is taking steps to verify the identity of its users, an exchange can create a sense of safety and security that may attract new customers.

Final Word

Overall, KYC is an important tool that can help to create a safer and more secure business environment. However, businesses must carefully consider the risks and benefits of KYC before deciding whether or not to implement such policies and procedures.

The author is CEO, KuCoin exchange

Also Read: Japan might ease tax burdens on cryptocurrency startups in 2023

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What is the importance of KYC in cryptocurrency user information security - The Financial Express

Cryptocurrency adoption is rising in India – Techstory

At present, Bitcoin has the same number of users as the internet did in 1999. It paints a pretty clear picture of where we are in terms of the adoption of cryptocurrencies all across the world. While developed countries are surely ahead in terms of innovation, developing economies havent been left behind. India is one such nation where cryptocurrency adoption is rising at a phenomenal pace.

A report from Chainalysis said that India ranked no 2 in terms of crypto adoption among all nations globally. On the other hand, Finders report shows that India ranked no 1 on the same index. This is happening despite the governments attempt to discourage crypto investment and adoption by levying a 30% and 1% TDS on crypto transactions.

The most popular crypto owned by Indian citizens is Bitcoin, with 29.9% ownership as of April 2022. At no 2, we have Dogecoin, which got really popular this year after Elon Musk hyped it up and is owned by 23% Indians. Other popular cryptocurrencies like Ethereum, Solana, and Ripple are also on the top 10 list.

According to cryptogorilla.com, It is estimated that 27 million people, 2.0% of Indias total population, currently own cryptocurrency. Considering that India has a population of over 1.4 billion people, it seems to be a pretty small figure. However, things are just getting started, and if the government is a little supportive of regulations, India can lead the way in terms of the mass adoption of crypto.

But it wont be as easy as Indian banks, and especially the RBI has been pretty restrictive about crypto. Indias FM has also recently warned investors about the current investigations that crypto exchanges like WazirX and Vauld are facing over money laundering and KYC issues.

India is working on a CBDC (Central Bank Digital currency), which could change the countrys outlook on crypto. Plus, with time, as the crypto market gets bigger and more countries adopt a positive approach towards the sector, Indian authorities cannot simply just sit around.

The most important thing right now is a better tax regime that doesnt strangle crypto investors. For example, according to the current rules, investors cannot offset losses with profits, and the 30% tax is also a flat rate. This makes trading incredibly difficult, and profit margins get slimmer.

There is also a need for regulatory clarity that allows foreign exchanges and businesses to operate in India. Do you remember when Coinbase came to India and had to pause its operations due to UPI problems? Or when banks were sending notices to customers for transferring funds to crypto exchanges? These things cannot happen anymore, or crypto adoption will be difficult.

India does have the potential to lead crypto adoption globally, with 50% of its population below the age of 25. Millennials have always been more accepting of new technologies, and the same is the case for crypto.

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Cryptocurrency adoption is rising in India - Techstory

31 percent of Russians are expected to make cryptocurrency purchase in the next six months: Survey – The Financial Express

Russias cryptocurrency adoption has not beein going at a fast pace due to maximum amount of Russians never buying cryptocurrency, on the basis of a survey, according to Cointelegraph. Switzerland-based cryptocurrency wallet provider Tangem conducted a survey to make analysis on Russian cryptocurrency investors, as said by local news agency Kommersant.

As stated by Cointelegraph, around 72% of 2,100 respondents, based on the survey, claimed about never buying cryptocurrencies such as Bitcoin (BTC), which has left Russian cryptocurrency miners in a minority. Around nine percent of survey participants denoted that they carried a negative outlook towards cryptocurrencies, 45% of the respondents said about carrying a positive outlook towards digital currencies and 46% remained neutral. The survey stated that 44% of respondents choose to invest in cryptocurrencies because of its ability to make earnings. On the other hand, 68% of respondents gave the reason for not investing in cryptocurrencies due to its absence of physical backing.

On the basis of information by Cointelegraph, despite maximum amount of Russians being introduced to cryptocurrency investments, many are considering it as a potential investment. While 31% of respondents indicated about buying cryptocurrency in the upcoming six months, 40% claimed about remaining uncertain regarding the investment scenario. Around 30% of respondents didnt give any indication about buying cryptocurrencies. Tangems data mentioned that close to six percent of respondents were found to have good knowledge about cryptocurrencies, and 80% were only familiar with the term.

Moreover, Cointelegraph noted that estimations by Sergey Mendeleev, CEO, InDeFi stated that number of active and passive cryptocurrency Russian users currently stand at less than one precent out of the total 144.4 million population. Certain experts believe that Russians have been switching to cryptocurrency due to foreign currency restrictions by Bank of Russia. Earlier this year, Kremlin reported that Russians owned close to $200 billion worth of cryptocurrency by late 2021.

(With insights from Cointelegraph)

Also Read: Google grows the ambit of Internet security; includes everyone from children to the LGBTQIA+ community

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31 percent of Russians are expected to make cryptocurrency purchase in the next six months: Survey - The Financial Express

Cryptocurrency XRP Decreases More Than 3% Within 24 hours – Benzinga

XRP's XRP/USD price has decreased 3.08% over the past 24 hours to $0.34, continuing its downward trend over the past week of -1.0%, moving from $0.34 to its current price.

The chart below compares the price movement and volatility for XRP over the past 24 hours (left) to its price movement over the past week (right). The gray bands are Bollinger Bands, measuring the volatility for both the daily and weekly price movements. The wider the bands are, or the larger the gray area is at any given moment, the larger the volatility.

The trading volume for the coin has fallen 20.0% over the past week which is opposite, directionally, with the overall circulating supply of the coin, which has increased 0.23%. This brings the circulating supply to 49.54 billion, which makes up an estimated 49.54% of its max supply of 100.00 billion. According to our data, the current market cap ranking for XRP is #7 at $16.69 billion.

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Cryptocurrency XRP Decreases More Than 3% Within 24 hours - Benzinga

Cryptocurrency Flow Down More Than 4% Within 24 hours – Benzinga

Over the past 24 hours, Flow's FLOW/USD price has fallen 4.36% to $2.08. This continues its negative trend over the past week where it has experienced a 9.0% loss, moving from $2.3 to its current price.

The chart below compares the price movement and volatility for Flow over the past 24 hours (left) to its price movement over the past week (right). The gray bands are Bollinger Bands, measuring the volatility for both the daily and weekly price movements. The wider the bands are, or the larger the gray area is at any given moment, the larger the volatility.

The trading volume for the coin has fallen 72.0% over the past week, moving in tandem, directionally, with the overall circulating supply of the coin, which has decreased 0.39%. This brings the circulating supply to 1.04 billion, which makes up an estimated 74.51% of its max supply of 1.39 billion. According to our data, the current market cap ranking for FLOW is #32 at $2.15 billion.

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Cryptocurrency Flow Down More Than 4% Within 24 hours - Benzinga

Trump Calls for Investigation into Anti-American Censorship

Former President Donald Trump called on Congress to investigate the anti-American practice of censorship rampant across Americas corporations and big tech platforms.

Trumps comments came during Turning Point USAs Student Action Summit on Saturday in Tampa, Florida.Trump said:

But Ill talk about the next critical fight we need is for your energy to be put behind the battle to restore free speech in America. There is no such thing as a democracy that does not have free speech. We dont have free speech anymore. We have canceled culture we have fake news media that reports certain news incorrectly.

He also called out corporate media for its biased coverage of political issues and for being partners with the Democrats:

And if its positive about the other side, they make it much better and if its bad about the other side, they wont even report it. We saw that in the election where they wouldnt report bad news about the other side. Its a disgrace. The media has taken a place in our culture and our history that nobody ever thought would be possible. They are no longer respected.

Trump warned that if censorship continues to grow across the country, America will turn into Venezuela on steroids. He said:

If debate can be silenced, if dissent can be suppressed. If conservative ideas can be systematically shut down, then very simply, we do not have a free country anymor. Thats what happened with communism and various countries. Thats what happened with Venezuela.

Trump added that the next congress and the next president have a civic duty to be ruthless in going after this new censorship regime.

We have to, because if we do not destroy censorship, censorship will destroy America. Our country will rot from the corruption confusion, he urged.

As soon as we have the power. Congress should immediately launch a full scale investigation into the rise of totally anti American practice, Trump declared.

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Trump Calls for Investigation into Anti-American Censorship

The Ethereum community is worried about censorship as the merge approaches. Heres why – Fortune

The Ethereum community, which is known for a sunny rainbow-and-unicorns vibe, is unusually serious as of late. Following a recent move by the U.S. Treasury Department to target a batch of crypto-related open source code, one word keeps coming up in Ethereum circles: censorship.

The concern surfaced earlier this month when the Treasurys Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, an Ethereum-based cryptocurrency mixer that allows users to obfuscate transactions, and a series of Ethereum addressesbarring all Americans from interacting with both the mixer and the addresses.

According to Treasury officials, Tornado Cash has laundered over $7 billion in cryptocurrency since its creation in 2019, and has become a favorite destination for the infamous North Korean hacking outfit known as the Lazarus Group.

The Tornado Cash announcement marked a watershed moment for the crypto world. Although the Treasury has long targeted financial criminals and those who support terrorist activity, its unusual for the agency to sanction a piece of technologyin this case a mixerdirectly.

All of this set off concern within the Ethereum community about whether the blockchain is resistant to government censorshipconcern that has only increased as Ethereum approaches its highly anticipated merge upgrade next month.

Though applications existing on Ethereum can be censored, as weve seen with Tornado Cash, whether the Ethereum blockchain itself can be subject to censorship has been a topic of debate, especially with Ethereums upcoming merge.

Thats because the merge will shift Ethereum from a proof of work (PoW) consensus model to proof of stake (PoS), and, in turn, validators will have the responsibility of creating new blocks on-chain and verifying transactions, rather than miners. To become a validator, one must deposit 32 Ethera sum, currently worth around $50,000, that is intended to ensure that participants have a stake in the success of the network.

A single entity, however, can also run multiple validators, so long as the entity can afford it, and in doing so arguably garner more control. As a result, some within the Ethereum community have become concerned about the emergence of powerful, centralized entities after the mergeentities that could be pliant when it comes to carrying out government censorship requests.

Those concerned about censorship have raised various hypotheticals: Might a validator refuse to confirm a block to the Ethereum blockchain because it contains Tornado Cash transactions? Would fear of legal repercussions lead them to ignore or reject such blocks?

It is unknown whether any of this will happen, or whether the government will target validators, but such questions have been at the center of debate onlineespecially as it circulated on crypto Twitter that 66% of the Beacon Chain [or proof-of-stake chain] validators will adhere to OFAC regulations, including Coinbase and Kraken.

Ethereum creator Vitalik Buterin weighed in on this discussion himself, and signaled his support in slashing the stake of any validators that censor the Ethereum protocol if asked by U.S. regulators.

Even Coinbase CEO Brian Armstrong suggested hed rather stop the staking business of his cryptocurrency exchange than comply with any potential censorship.

Another concern post-merge involves MEVmaximal extractable value (formerly miner extractable value)and potential MEV-Boost issues, and how these could increase the potential for censorship.

MEV describes the profit a validator can earn by selecting or reordering transactions within blocks, while MEV-Boost is an optional software built for proof-of-stake Ethereum.

MEV-Boost allows validators to outsource block production to maximize their reward. Though there are upsides to MEV and MEV-Boost, both can also be used by bad actors in a malicious way. Specifically, some within the Ethereum community are worried about censorship of MEV-Boost relay operators, or entities that connect validators to block builders; the fear is that the existence of these relay operators offers a big new target for censorship.

The concern is so widespread that it was addressed during the most recent Ethereum Core Developers meeting.

If we allow censorship of user transactions on the network, then we basically failed. This is the hill that Im willing to die on, developer Marius van der Wijden said during the call. If we start allowing users to be censored on Ethereum then this whole thing doesnt make sense, and I will be leaving the ecosystem.

Most Ethereum developers, however, sounded hopeful that potential MEV-related issues, especially involving censorship, would not be prevalent threats, and remained focused on building Ethereum as a censorship-free protocol.

While some may take the topic more seriously than others, experts in the cryptocurrency space dont believe censorship-related fears are overblown, especially if blockchains are more widely used by normies as time goes on.

If crypto is going to go mainstreamits going to have to exist within a modern regulatory framework. That means adhering to OFAC sanctions, allowing for strong protections from money laundering, and so on, Matt Hougan, Bitwise CIO, tells Fortune. The question vis--vis ETH validators, however, is whether that adherence should occur at the foundational technological layer, or on the application and user side.

Hougan made an analogy involving the internet, asking whether libel and hate speech should be banned by the internet itself, or handled at the user and application layer instead. History suggests that freedom, innovation, and growth are best served when technologies are allowed to be credibly neutral, and we police bad acts by policing bad actors, he said.

And though the merge hasnt happened yet, weve already seen forms of censorship on Ethereum in a few ways.

Ethereum infrastructure companies Infura and Alchemy have blocked access to Tornado Cash. Circle, the company behind the popular USDC stablecoin, froze Tornado Cashlinked addresses. Uniswap, the largest decentralized exchange on Ethereum, has also reportedly blocked Tornado Cashlinked addresses. Even Ethermine, the largest Ethereum miner, stopped processing Tornado Cash transactions, being dubbed the first hard evidence seen of censorship actually happening in block production online.

Looking ahead, only time will tell how, or if, censorship resistance is maintained.

Some online predict the decentralized finance (DeFi) space will continue to split into two: one being a regulated, compliant version of DeFi, and the other being badlands DeFi, as Gabriel Shapiro, general counsel at Delphi Labs, wrote on Twitter. Most blue-chip projects will embrace the former.

To Hougan, an interesting part of this process is that the Ethereum community is determining through discussion how important decentralization is as a core value. Different blockchains will decide on different answers to this question, and it will be interesting to see which answer the market rewards and punishes.

Until then, the debate surrounding censorship on Ethereum is likely to get louder.

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The Ethereum community is worried about censorship as the merge approaches. Heres why - Fortune

States That Have Enacted Book Ban Laws: Book Censorship News, August 26, 2022 – Book Riot

As the new school year kicks off or is already in progress in many places its worth taking a look at the states which have enacted laws that ban books. This guide is not comprehensive, but gives an overview of the legislation currently on the books that will impact how teachers and librarians select and share reading material in classrooms and libraries.

Before diving it, it is worth noting these are all red states. It is a popular and unhelpful narrative to simply write off these laws because of where they are being enacted. In many of these states, there is significant disenfranchisement of voters in addition to laws which make voting harder than it needs to be; this ensures a certain political persuasion remains in power. These systemic barriers to voting are the same ones which need to be considered in arguments that the people who cant get these books from libraries thanks to these laws can just get them at the bookstore. We are in the business of dismantling hurdles, not leaving them where they are.

Further, as weve seen through these censorship roundups over the past year+, it does not matter where or how book bans begin. They trickle through each and every state in varying degrees, and what you see here could become models for future legislation elsewhere. Finally, writing off certain states does not help in ending book bans. Everyone, regardless of political affiliation or state of residence, deserves the right to access books, reading material, and information they want to. Fighting fire with fire helps no one.

Note that this list is not comprehensive. Ive pulled out some of the biggest laws in several states that are having an immediate impact and that will likely influence further legislation within and beyond their jurisdictions.

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Florida

At least two bills in Florida are allowing for sweeping changes to books in schools and libraries. The first, House Bill 1467, gives more space for parental input and feedback on books and materials used in schools, including listing all the titles in classrooms and libraries. Oversight in approving materials now must go through several hoops, creating a tremendous backlog in acquiring and using new, up-to-date, and timely material.

Floridas House Bill 1557, known as the Parental Rights in Education Bill or the Dont Say Gay bill, curtails discussion of gender or sexual identity in public schools. The bill, purposefully vague, has created a chilling effect on what materials may or may not be used or discussed in schools and school libraries.

Missouri

Effective this school year is Senate Bill 775 which limits reading materials in schools, public or private. Books deemed sexually explicit are illegal. Those who make them available will be charged with a class A misdemeanor, which could lead to a year in jail and a $2,000 fine.

Oklahoma

House Bill 1775, which bans Critical Race Theory from classrooms, has been used not only to remove books by and about people of color from classrooms, but is creating loopholes for politicians to seek the removal of queer books as well. While OklahomasSenate Bill 1142never made it past the Senate, it has created a flurry of fear among educators; that bill threatened that parents who disliked a book could file a complaint and were the complaint not addressed within 30 days, there could be a $10,000 per day penalty.

Effective in November, House Bill 3702 will deeply impact the access students (and adults) have to online databases, including those which house ebooks. The bill says any vendor who is unable to certify they do not allow access to obscene materials or pornography cannot be licensed; public schools and public libraries would need to annually report to the state about compliance. Of course, the lack of specificity in the bill means that any complaint could mean revoking access to information for anyone who uses such databases.

Tennessee

If you have not yet seen the above viral TikTok of a Tennessee teacher in her classroom during unpaid time, you should. This is an example of how new educational laws are harming not just students, but educators who are preparing for the new year.

The Senate Bill 2407/House Bill 2154 is what the above teacher is referencing, wherein it is now required all teachers have a full catalog of every book available in their classrooms for parents to access. Teachers need to give those lists to their school librarian who will then compare those to approved and unapproved materials lists created bysomeoneto determine whether or not theyre appropriate for the classroom. The bill suggests that someone is a board of education, but even that is not entirely clear. What is clear is those boards are being impacted by right-wing interests eager to pursue their own agendas, rather than putting whats best for students and educators at the forefront (Related, Tennessee is the same state that plans on appointing public library boards through local politicians, further undermining professional knowledge, judgment, and ethics from those working in schools and libraries).

Senate Bill 2292 redefines obscene materials, ensuring that anything deemed obscene may be removed from educational institutions. This means anything that was once seen as educational is no longer considered educational if it meets the flimsy and unclear definition of obscene or pornography. It includes provisions that follow those in Oklahoma which will change access to online materials including databases and ebooks if any material contained within them are inappropriate.

Texas

Texas has been among the quickest to make creative interpretations of obscenity and has been a leader in pushing for book bans. Matt Krauses infamous request that schools remove over 850 books was followed quickly by the Texas Education Associations draft for collection development that creates space for parental input in books across the state. Now, as current Governor Greg Abbott pushes to keep his role as governor, hes unveiled a proposal for stronger parental rights across the state. It has not yet been put to the legislature, but it is part of his campaign. You can see the entire proposal here; it would give parents far more rights to determine what is an is not appropriate in schools and libraries and would certainly mimic Floridas Dont Say Gay bill.

Utah

House Bill 374, known as the Sensitive Materials in Schools bill, prohibits sensitive material in schools. The bill allows the states Attorney General to instruct education workers about what is and is not sensitive material and provides a mechanism for parents to file formal complaints about school material. The Attorney Generals guidance on this bill has been updated twice, and the most recent guidelines tells districts they need to remove material deemed sexually explicit and/or pornography (defined by nebulous state statutes) immediately.

You have the ability to track similar bills in your own state in at least two ways. The first is to subscribe to the newsletters and social media accounts of your local state representatives and the second is to do periodic searches of House and Senate bills in your state.

To search for bills in your own state, head to your state legislative tracker. It is called something different everywhere. In Illinois, for example, its the Illinois General Assembly website. This gives status updates of all legislation from introduction and first readings through it being enacted or vetoed, and its possible to search by bill number or keyword. You can also use a source like OpenStates to search for legislation in your state, as well as to seek out your local representatives.

Once you find where updates on legislation live, then you want to do a periodic search of several keywords. I would recommend doing these monthly if your state is not currently moving a bill through as fast as possible (the above states, for example, might be worth searching more frequently). Among some of the key words to search:

This will get you most of the bills being discussed. Obviously, this is not comprehensive, but if you pull words or phrases from the above-listed bills and/or through the news pieces you read about censorship, youll be able to add to this list. If your state has the option to peruse the legislative committees, look through the education committees work. This gives you both a sense of whats being worked on and will help you find further key words to search.

If you see a bill that, as you read, is clearly a censorship bill, this is when you write a letter to your representative in opposition. There are templates you can use, though writing from your heart as someone who believes in access to books for all is more than enough. In some states, when a bill is being voted on, you may be able to submit a witness slip (your approval or opposition).

You might also be able to find state-based groups tracking legislation related to censorship and education. In Illinois, for example, the Witness Slip Facebook group which is public is a tremendous resource for staying abreast of whats happening.

First, this week, Fox News posted the three-step action plan for parents in the coming school year. Ive tweeted the screen shots and am embedding below. I share this as context to what you should anticipate seeing in book censorship news for the next few months (at least). Its a reminder to anyone working in public education or libraries to not share anything in writing you do not want pulled through a Freedom of Information Request Act.

This week, I was a guest on PBSs News Hour, talking about book censorship and why school board elections are a big deal. You can watch the 7 minute segment here.

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States That Have Enacted Book Ban Laws: Book Censorship News, August 26, 2022 - Book Riot

Can Crypto Mixers And Privacy Coins Withstand Censorship? – Coin Culture

In reaction to the sanctions, organisations such as Coin Center have defended the mixer, stating that the smart contract code is not a sanctionable entity.

It is unknown whether privacy coins such as Monero would face similar restrictions in light of this new precedence. A hard fork upgrade on August 13 made it more challenging to trace Monero transactions.

Contrary to the idea that all bitcoin transactions are private by nature, the data on a blockchain is public, and transactions may be traced. Crypto mixers and privacy coins were established to facilitate the open financial systems anonymity. But each faces unique uphill struggles.

A crypto mixer, also a tumbler or blender, is a transaction mixing tool or service anybody can use to conceal a crypto wallets source of funds. These technologies were initially built for bitcoin in 2013, but once solutions like Tornado Cash made them available for a range of cryptocurrencies, they became a popular alternative to privacy coins.

Blender.io was the first custodial mixer sanctioned by the Office of Foreign Assets Control of the US Department of the Treasury (OFAC). It didnt garner the same attention as Tornado Cash since it belonged to the pattern of prior punishments against individuals and organisations.

Tornado Cashis an Ethereum-based crypto mixer that mixes ETH and ERC-20 tokens using non-custodial smart contracts. Through a zero-knowledge proof contract, users contribute funds to smart contract addresses that arrange them by the amount and efficiently mix the deposits.

For instance, suppose you wish to combine 11 ETH. Because deposits are categorised by amount, you send 10 ETH to the 10 ETH mixer and 1 ETH to the 1 ETH mixer. Once funds are given to each mixer, the zero-knowledge proof verifies that you provided a deposit to each one without revealing which one was initially yours. This provides the equivalent of a withdrawal authorisation slip for each mixer.

On August 8, 2022, OFAC added a list of Tornado Cash-related addresses to the same list of sanctioned addresses, including Blender.io. OFAC used the same language for Blender.io as it did for Blender.io, but failed to recognise their significant custody distinction. Coin Center asserts that Tornado Cash has two distinct components: the decentralised group of governing members, Tornado Cash Entity and the immutable smart contract coin mixers Tornado Cash Application.

The Tornado Cash Entity cannot modify or update the Tornado Cash Application due to the destruction of the original developers administrative keys. Smart contracts exist so long as the Ethereum blockchain is operational. Therefore, even if the Tornado Cash website is down, anybody can develop a replacement front end or communicate with the smart contracts directly that gives users access to the same mixers.

The issue is that OFAC included these immutable addresses for smart contracts on its list of penalties. Consequently, there are currently innocent Americans with funds in these mixes. If they attempt to transfer the funds, they will violate the law and face penalties. And because the application is not a legal business, it cannot petition OFAC to remove the sanctions.

Coin Center claims that OFAC did not cite the legal authority to add the smart contract addresses to the sanctions list since the Tornado Cash Application is not an organisation, triggering constitutional concerns. In response to OFACs notification, firms agreed to filter individuals associated with these IP addresses. Aave, a decentralised financial application, prohibited any user that received Tornado Cash payments in a dust assault.

Privacy coins are digital currencies that employ various techniques to conceal IP addresses, wallet balances, and the movement of transactions. Z-cash and Monero are the two most popular privacy-centric cryptocurrencies. Z-cash is a cryptocurrency that protects transaction data primarily through zero-knowledge proofs. They vary from crypto mixers in transforming financial privacy into a product rather than a benefit.

Since this early setback, Z-cash has never returned to the highs of the 2017 bull cycle and presently stands second in total market capitalisation behind Monero. While Monero prices were able to hit 2017 levels in 2021, they could not surpass their all-time high.

Monero is a privacy-centric cryptocurrency that provides financial anonymity via privacy-enhanced blockchain encryption. Every transaction uses one-time stealth addresses to conceal the balances of public addresses.

The protocol for Monero was improved on August 13. The earlier version of Monero provided a layer of anonymity, but its entire untraceability was questionable. In 2018, detractors said that the process of elimination might discover the signature rings inputs. And in 2021, CipherTracer purportedly patented a transaction-tracking technology used by the Department of Homeland Security (DHS).

Even if CipherTracer uncovered actual flaws, the scope of their repercussions remains unknown. They did not reveal their tactics or degree of success. Since it prevented CipherTracer from being accessed by anybody unwilling to pay, this earlier version nevertheless provided some financial anonymity.

In Canada, efforts were undertaken to trace the sources of funding for the trucker freedom convoy. The authorities sanctioned 34 cryptocurrency wallets associated with the movement, and Monero addresses were included on that list.

By raising the number of transactions in a ring signature, the Monero team expect this upgrade will solve any possible security loopholes. Even if the anticipated Monero chain enhancements are essential, the principles of tracking the likely source of funds remain the same after the fork. If the update is successful in eliminating these backdoors, there is a danger that OFAC might take similar action against Monero.

The developers prospective capacity to benefit from these smart contracts renders him accountable. The Dutch financial crimes agency FIOD detained a Tornado Cash developer suspected of using the application to launder money. It is unknown if he was arrested for his attempts to launder money or for his association with others who did so.

Though major privacy coins like Monero and Z-cash are actively trying to improve transaction privacy, they havent obtained the same level of acceptance as leading layer-1 blockchains such asEthereum. Many rivals, notably Secret Network and Oasis Network, believe that privacy coins do not provide a privacy layer that can be utilised to create Web3.

In 2020, Secret Network was the first privacy-based blockchain to offer the programmability of smart contracts. It resides in the Cosmos ecosystem and works towards a Web3 privacy goal. Multiple applications have been released, including the decentralised messaging service Altermail and the decentralised exchange SiennaSwap.

However, Secret Network and its rivals confront the typical difficulty of a crowded market. They have a long way to go before overcoming the market domination of Monero and Z-Cash. The prospect of punishment has spurred many members of the Z-Cash community to investigate the possibility of programming their smart contracts.

Amid the battle for financial privacy, the state has used two distinct instruments thus far. They employed the regulatory sanctions hammer with crypto mixers. If one financial privacy method is too popular with criminals or difficult to trace, their strategy may be to eliminate it.

Advocacy groups such as Coin Center may challenge such measures in court, but this may take years. In the meanwhile, the sanctions are probably harming innocent Americans.

They may continue their cat-and-mouse game with developer upgrades via investigations for other privacy solutions.

However, user adoption is a crucial aspect of this game. As more users use mixers or privacy coins, tracing transactions becomes progressively more difficult. It is comparable to the traditional police pursuit into a tiny alley. If the suspect approaches a busy procession, they can brush themselves off and blend with the crowd.

If a privacy coin, mixer, or base-layer privacy solution obtains widespread adoption, its resistance to censorship might increase. State officials would struggle to garner political support for sweeping punishments or the necessary technologies to circumvent privacy protections. And the possible repercussions of Tornado Cash punishments on Ethereum validators may draw millions more into this discussion.

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Can Crypto Mixers And Privacy Coins Withstand Censorship? - Coin Culture

Madison, Mississippi, School District Restricts Books on Race and LGBTQ+ Themes – Blogging Censorship

The National Coalition Against Censorship (NCAC) has written to the Madison County School Board in Ridgeland, Mississippi, regarding recent restrictions on 10 books, requiring students to obtain parental permission in order to read them.

The 10 books in question address race-related or LQBTQ+ themes, and we are concerned that the district may have unconstitutionally targeted these books for the political views they express.

We understand that school districts can be subject to heavy pressure to censor books, which is why it is vital to have strong book challenge procedures. The district should strive to address the concerns of parents by explaining the pedagogical purposes of the library and instructional materials chosen by qualified education professionals, rather than by simply labeling them as supposedly problematic.

NCAC strongly urges the district to reconsider this policy and to adopt alternatives which do not endanger the rights of students to read and learn.

Please read our full letter to the Board here:

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Madison, Mississippi, School District Restricts Books on Race and LGBTQ+ Themes - Blogging Censorship