Opinion of: Daniel Taylor, Head of Politics at Zumo
Peer throughout the average meeting of crypto regulation advice, and you’ll quickly notice a characteristic pattern: crowds of tradfi lawyers and ex-finance services that react to documents from financial services supervisory authorities and determine the law on how crypto assets are carried out in the longer term.
It speaks for the virtually parallel worlds that we saw in Crypto. On the one hand, there are integrators, assimilators and the “mainstream users”. On the opposite hand, the technological innovative is nearly completely removed.
Krypto technologists could think that this has nothing to do with them – that regulation and compliance will not be areas that deserve their attention.
To take this attitude is a direct threat to today's crypto users.
The Crypto-Tradfi separates the connection
In May 2025, Coinbase suffered a knowledge injury through which personal customer data was uncovered, which is thought through the regulatory obligation through the KYC process. It has arrange between 180 and 400 million US dollars for the reimbursement of consumers in the following social engineering attacks.
The crypto world reacted to the undeniable fact that many within the crypto sector can be obvious: that the technological solutions exist with a view to make such mass data acquisition superfluous.
This may be achieved through the widespread use of decentralized digital identities and no cryptography without knowledge with a view to reveal claims without uncovering sensitive data. If corporations should not have customer data, they can’t endanger them.
The urgent need for data protection improvement technologies
This is just not an issue of a minor trouble-only relevant for the centralized exchange and the neo-crypto brokers who dominate today's crypto user landscape.
Regardless of whether we prefer it or not, stock exchanges for the remaining of the (not customer-specific) crypto ecosystem remain and out of doors the ramps. KYC is just not the one data-related requirement that’s exposed to crypto exchanges.
Other requirements in Great Britain, each current (travel gel) and future (Cryptoasset Reporting Framework), indicate a future through which the transaction data of the users and the actual identities and addresses of the users are properly identified and packed under the historically incompetent, if not pronounced.
Crypto users are at risk
With the rise of physical “wrench attacks” on well -known crypto -asset owners in France and elsewhere, this could ring all of our alarm bells and encourage us with a sense of collective urgency.
Youngest: Violent crypto robberies on the rise: six attacks through which investors have been targeted
It is a crypto disaster within the creation of crypto (not to say social) disasters in production in the event that they don’t construct up when it comes to data protection improvement technologies and in applications. And to not query how crypto-native technologies might be used to attain equivalent results is increasingly unexcused.
In order to alter the image, this opinion must present this opinion within the regulatory conversations which are necessary and supply technological solutions that bridge the apparent need. Crypto consumers deserve digital solutions that provide more individual security and more individual privacy in delay.
How to guide crypto technologists
The excellent news is that the crypto industry has a track record within the introduction of technical -regulating innovations. Proof-of-reserve systems have turn into an on a regular basis option to arrange demands on platforms and support for assets. Data protection pool concepts examine the upkeep of Onchain's privacy and at the identical time adheres to compliance expectations. And solutions arise with a view to completely bring critical legal functions. We need more technology lawyers and techno-Lawyers who can marry technological innovations with the needs of the regulatory environment.
And if we don't? We mustn’t keep illusions that the present regulations on this trajectory are complete, which just about exclusively create on legacy systems and rules and definitely don’t take such aspects into consideration.
If the sector wants the longer term different, we have now to be certain that the political conversation not only takes place in a room of established corporations, tradfi lawyers and suits, but slightly takes into consideration more extensive perspectives.
Merging the Old World and the brand new
Crypto regulatory framework is at risk of legally recognizing individuals with the Old World as a reference scope and without imagination, beyond which may be seen beyond. We must act quickly to present more technically-based and crypto-native views within the regulatory commitment. Otherwise, we risk being with rules that will not be progressive and adapting to the unique properties and the potential of the crypto assets sector.
This signifies that they now not bury heads within the sand on regulatory realities and rise up the regulatory future. This signifies that more technologists must join the regulatory conversation with a view to promote technologies for privacy and crypto-native solutions.
Opinion of: Daniel Taylor, Head of Politics at Zumo.
This article serves general information purposes and mustn’t be thought to be legal or investment advice. The views, thoughts and opinions which are expressed listed here are solely that of the creator and don’t necessarily reflect the views and opinions of cointelegraph or don’t necessarily represent them.
