Academic paper urges governments to target public blockchains

A recent academic paper published in the Journal of Cybersecurity suggests that governments should consider targeting public blockchains to combat money laundering, especially focusing on privacy-preserving cryptocurrencies.  

The paper, titled "Reconciliation of Anti-Money Laundering Instruments and European Data Protection Requirements in Permissionless Blockchain Spaces," outlines several methods to undermine trust in decentralized networks.  

The author highlights tactics such as 51% attacks, price suppression, and Sybil attacks as potential ways to disrupt permissionless blockchain systems.  

These actions, according to the paper, could weaken users' confidence in the reliability of blockchain networks.  

However, the author stresses that such measures should only be used as a "last resort" after more traditional regulatory efforts like blacklisting wallet addresses, sanctioning transactions, and flagging suspicious activity have been exhausted.  

The paper calls for a careful balance between enforcing regulatory compliance, protecting user privacy, and fostering innovation.  

Despite its original publication in 2021, its relevance has resurfaced as discussions on privacy-focused cryptocurrencies like Monero grow.  

Monero, a well-known privacy-enhancing cryptocurrency, was specifically mentioned in the paper, and some users believe that similar strategies may already be influencing its current price, which stands at $147.  

The report’s timing coincides with increasing scrutiny on privacy tools.  

Recently, Kraken, a cryptocurrency exchange, delisted Monero in the European Economic Area to comply with European Union regulations.  

In addition, a U.S. judge ruled that the case against Tornado Cash (CRYPTO:TORN) co-founder Roman Storm could proceed, further amplifying debates surrounding the viability of privacy-enhancing tools.  

The ongoing governmental crackdown on these tools has raised concerns about whether these actions may stifle innovation or provide necessary measures to fight illicit activities like money laundering.