U.S. Rep. Bill Foster (D-Ill.), who also co-chairs the Congressional Blockchain Caucus, believes a trusted third party, such as the courts, should have access to a crypto backdoor.
In an interview with Axios on Tuesday, the congressman said that until the industry could grapple with crypto-ransomware attacks, total anonymity would be "very hard to sustain."
Foster said new legislation and rules could establish a type of pseudo-anonymity where only judicial powers would have access to certain information. The congressman suggested allowing the court to use its access to a "very heavily guarded key," a "cryptographic backdoor in essence," allowing it to reverse transactions on the blockchain.
"You (authorities) have to be able to go to court to unmask participants under some circumstances," said Foster. "It does not have to be visible to the whole world."
The congressman also drew a distinction between digital and physical assets in the context of ransomware attacks, providing an example of unmarked dollar bills being put in a trash can versus total anonymity afforded to hackers.
The fundamental decision one has to make when it comes to crypto is between retaining true anonymity versus being able to unmask participants and reverse fraudulent or mistaken transactions, the congressman noted.
"There's not a technological alternative that I am aware of," said Foster. "I think for most people, if they are 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."
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.