Congressman Bill Foster Says Government Should Be able To Reverse Crypto Transactions

U.S. Congressman Bill Foster has suggested that governments should be able to identify crypto holders and reverse crypto transactions. Foster's comments came during a virtual event by Axios Events that took the form of a conversation on the future of cryptocurrency regulation.

The congressman and Axios technology explored investor confidence in new forms of digital currency, questioning, in particular, the anonymity that the blockchain offers.

Foster’s comments on cryptocurrency regulation will likely ruffle some feathers, particularly his comments on how certain protections should be granted to the government when it comes to cryptocurrency. In terms of anonymity, Foster stated that under some circumstances “you have to be able to go to a court to unmask participants”.

Crypto enthusiasts are unlikely to be enthused over the congressman’s suggestions, particularly his suggestion of using a “cryptographic backdoor” to minimise fraudulent usage. Oster acknowledged that his suggestions will not be welcomed by what he refers to as ‘crypto purists’.

“I’ve just said about three things there that will drive the crypto purists berserk, like the trusted third party and so on. But in fact, there’s not a technological alternative that I’m aware of. For most people, if they’re going to have a big part of their net worth tied up in crypto assets, they’re going to want to have that security blanket of a trusted third party that can solve the problem.”

The theoretical reversal of a transaction on the blockchain would require significant work from regulatory bodies, and in the case of Bitcoin it would require at least a 51% attack. 

Following the Colonial Pipeline ransomware attack last month, conversations such as these on the future of cryptocurrency regulation have been increasing. While the FBI were able to retrieve the bitcoin the hackers took as ransom, without significant changes in regulation and technological advancements, recouping funds in the future may require a trusted third party.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.