Making Anonymous Payments Work For Society

Dateline: Amsterdam, 4th June 2025.Earlier this year, North Korean hackers successfully cashed out the first $300 million of the proceeds from their record-breaking $1.5 billion crypto theft from the ByBit Exchange. They are getting good at this: crooks linked to North Korea have stolen more than $6 billion in cryptoassets since 2017 (with the proceeds reportedly spent on the country’s ballistic missile program). Elliptic says the incident is almost certainly the single largest known theft of any kind in all time, a record previously held by Saddam Hussein, who stole $1 billion from the Iraqi Central Bank on the eve of the 2003 Iraq War.ShareRecognising the CostsThat’s the thing about anonymous, untraceable digital assets: the bad guys have them too. This incident nudges the crypto community between the Scylla of crime and Charybdis of censorship. Do you accept anonymity, and accept the societal harms that results on the basis that overall it is better for citizens going about their everyday lives to avoid surveillance or do you accept censorship and accept that not all transactions should be allowed? Privacy is an emotive topic, anonymity even more so, and when it comes to money and payments it is important to understand the nuances!The privacy-first and anonymity-first views seem diametrically opposed. But there may well be a way to support both positions in such a way as to enhance net welfare. At the moment, the middle-ground perspective focuses on Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations for centralized exchanges and…Making Anonymous Payments Work For Society