USA UU. should have the power to reverse transactions with Bitcoin, says congressman

Key facts:
  • Bill Foster is a Democratic congressman from the United States. UU. for the state of Illinois.

  • According to the congressman, using Bitcoin can be seen as criminal involvement.

The congressman of the house of representatives Bill Foster considered, in an interview, that the government of the United States must create tools that allow, through a court, reverse transactions with bitcoin and other cryptocurrencies, before theft or ransomware attacks.

The conference” A conversation about the future of cryptocurrency regulation”, offered by the news portal Axios, it brought together various figures from the world of politics to discuss what future scenarios cryptocurrency regulations might present.

The interview led by Dan Primack, editor of Axios, the congressman gave his opinion about what the U.S. position should be. UU. before the use of cryptocurrencies.

According to the congressman, the custody of cryptocurrencies and anonymity, both in technical and legal aspects, should be considered within the legal framework of the United States. Source: Axios.

One of the opinions that caused the greatest controversy in the cryptocurrency ecosystem, was to assume that the United States could and should create tools that allow to reverse transactions, through a court, against attacks or theft. This after Dan asked him about what happened in con Colonial Pipeline, in which the FBI claimed to have seized the BTC paid as part of the extortion. In this case some media inferred that the FBI hacked the Bitcoin network, but it did not.

In this regard, Foster also mentions that such measures would even serve as “protection against errors at the time of sending”.

It is worth mentioning that such regulatory scenarios are impossible in Bitcoin. While they can create a law, there is no possibility of a transaction being reversed. This goes against the decentralization protocol and the same resilience that Bitcoin offers.

According to Foster himself, the United States must create a legal framework on know your customer (KYC) policies in which it can be determined which citizen each wallet belongs to.

Although it is impossible, at a technical level, to reverse a transaction in Bitcoin, with the proposal to register the cryptocurrencies that each citizen owns Foster proposes, that, in case a citizen is stolen his cryptocurrencies, he can go to “a trusted third party”. Would be a court who would basically be the holder of the private keys, to recover the cryptoassets.

I just said three things that will drive cryptocurrency purists crazy, like the trusted third party, etc. But in fact, there is no other technological alternative that I know of… Most people, if they are going to have a large chunk of their net worth in digital assets, will want to have that security blanket from a trusted third party that can solve the problem.

U.S. Congressman Bill Foster.

Some twitter users they considered this measure of” having a trusted third party ” as the antithesis of what a cryptocurrency means.

Bitcoin is not only used for criminal acts

One of the most famous cases in which Bitcoin was used for illicit acts was Silkroad. A portal hosted on the deep web that allowed you to sell everything, including drugs. All this using as a means of payment BTC. After being shut down by the FBI, its creator Ross Ulbricht was sentenced to life imprisonment.

Silkroad was not conceived just for the sale of drugs, just as Bitcoin does not just exist for criminal acts. However, according to the congressman, many within congress see bitcoin users as “de facto participants in a criminal conspiracy” because of its pseudonymous nature.

According to him, all this is under the motivation of protecting citizens, and large capitals, from theft or ransomware attacks. It is a type of cyberattack that is currently considered terrorism and was even on the agenda of the last G7 summit.

Reverse of a transaction before a hack: history of the Ethereum DAO

In April 2016, the DAO, a startup that raised just over USD 150 million in ETH, was materialized for the change of that moment. This being the largest fundraising in history through a crowfunding or collective fundraising.

However, on June 17 of the same year, the smart contract that stored the funds would be attacked due to an error in its programming. The hacker got close to $ 50 million in ETH of the total collected. This caused Ethereum programmers to step in making one of the most controversial decisions in the history of that cryptocurrency: roll back the entire network.

This operation required, through a hard fork, “reset” the entire blockchain to a block prior to the time of the hack. While the Ethereum community voted and agreed on the fork, this called into question the immutability of the network.

Recent Articles

Related Stories