A few changes...

duc · 24 August 2022 12:15

Hello Incognito community,

source: https://www.activism.net/cypherpunk/manifesto.html

Privacy is a fundamental human right that the Incognito community values, protects and upon which our platform is built. Our platform, however, requires legitimacy to be viable and to continue serving you and your privacy. The recent Tornado Cash’s sanctions, while being controversial, have raised concerns on the use of privacy platforms like Incognito.

As a result, we want to clarify our stance on this issue and our ongoing regulatory risk-mitigation approach.

Our emphasis is to ensure our users’ access to privacy while deterring money laundering and illegal activities.
Our action is to take steps in understanding how Virtual asset service providers (VASPs) deal with Anti-Money Laundering & Terrorist Financing (AML & CTF) regulations. Then, subsequently define what Incognito should do as a platform to provide a capability for VASPs to gradually become in line with the recommendations of the Financial Action Task Force on Anti-Money Laundering (FATF) on out-going virtual asset transactions from Incognito.

Practical deterrence activity (ETA: Sept 2022)

We believe that efforts to deter money-laundering and illegal activities could practically minimize, if not eliminate bad actors’ ability to move illegal funds through Incognito as well as preserve the ability of users (aka good actors) to interact with legitimate privacy tools and services.

The first task we will be working on is to detect and reject suspicious deposits (into Incognito). Currently, in the deposit (aka shielding) workflow, funds and transaction information are usually relayed by Incognito backend services to vault smart contracts so the services can integrate with reliable and trusted external services (e.g. TRM lab or coinfirm) for screening, detecting, monitoring and investigating crypto fraud and financial crimes, including but not limited to sanction lists. Suspicious transactions flagged by these services shall be rejected and be reverted to the original depositor’s wallet address.

This may be applied to both frontend and protocol levels so that we can prevent suspicious transactions in time regardless of tools (e.g. app, web, Metamask or script code) that a bad actor uses to move illegal money into Incognito.

Anti-Money Laundering & Terrorist Financing (ETA: Oct 2022)

This section is intended to provide a comprehensive understanding of AML & CTF measures recommended by the FATF. Recommended measures include customer due diligence, record-keeping, suspicious transaction report, and application of “Travel Rule” which provides necessary originator and beneficiary information for virtual asset transfers between VASPs. Based on these recommended measures, we need to decide what features we should support on our platform to enable our user to provide VASPs with his/her funds’ origin in a verifiable yet secured way.

Illustration of a typical user-flow from Incognito to a VASP

Customer Due Diligence (CDD)

Under the FATF recommendations, VASPs are required to undertake Customer Due Diligence (“CDD”) measures when establishing a business relationship. It is a fact that a VASP supports virtual assets moved out from Incognito and that a user’s intention to trade the assets does not impact the VASP’s ability to carry out CDD checks.

Transaction monitoring

Virtual assets that are moved out from Incognito platform are not different from other public assets. Therefore, a VASP is completely able to monitor a customer’s transactions (e.g. deposits, withdrawals, trades), and compare transaction patterns and volumes with the expected behavior, based on the VASP’s understanding of the nature of the customer or their business (as determined during the CDD checks).

As a party engaging in its customers’ transactions (either as a recipient, in the case of deposits, or a sender, in the case of withdrawals), a VASP has visibility of the transaction details. This allows the VASP to detect transaction patterns that do not match that customer’s expected behavior and investigate further to determine whether the unexpected behavior is suspicious.

Normally, VASPs would issue a unique deposit address to each customer, thus allowing deposits to be unequivocally attributed to a specific customer. It also requires that customers provide a payment address in order to receive withdrawals, allowing VASPs to conduct sanctions screening, or restrict withdrawals to white-listed addresses.

Record-keeping

In the same way that VASPs can monitor a customer’s transactions, they can also keep records of those transactions. It is important to note that the VASP always knows the payment address to which a withdrawal is sent.

Suspicious Transaction Reports

The ability to carry out transaction monitoring ensures that a VASP is able to detect any suspicious activity on the part of its customers. The ability to maintain records of its customers’ transactions ensures that the VASP possesses adequate information to make suspicious transaction reports where appropriate.

Travel Rule

Incognito should be designed to be compliant with the Travel Rule. The required originator and beneficiary information can be attached directly to a shielded transaction using the encrypted memo field. As the name implies, the contents of this field are encrypted when the transaction is added to the blockchain, thus preventing inappropriate or unauthorized disclosure of personal information.

This is the second task we will be working on:

Incognito wallet may prompt a user to attach the necessary information to a transaction via an encrypted memo.
A compliance tool that allows customers to show their funds’ origin, and VASPs can verify the validity of the historical statements as well.

Closing thoughts

Practical deterrence makes the network less susceptible to illegitimate use in a credible manner. As user security is a key privacy benefit, our goal is to ensure deposits and withdrawals from on- and off-ramps can still be executed smoothly and reliably.

This is a controversial topic and there might be mixed opinions among our users, especially regarding censorship resistance. Your helpful suggestions are welcome and we will discuss further in the comments down below.

Thank you!

3prime · 24 August 2022 17:24

from Imgflip Meme Generator

donniet · 24 August 2022 18:55

Edit: I meant to reply to @duc, but messed up.

Okay, here are my thoughts.

I fully understand not wanting this project to get shut down as happened to Tornado Cash. But, it seems to me that following the FATF guidelines will have a huge negative impact on the users of the Incognito wallet. To begin with, it won’t just be actual criminals who will get blacklisted by the VASPs. Political dissidents and liberty advocates will surely get blacklisted as well, thus making Incognito as useless for them as it would be for the actual criminals. And, if I understand things correctly, the VASPs are third parties that are not under control of the Incognito team. This would mean that these third parties would have control over who can access Incognito.

And, can we be real? The real purpose of the FATF has never been to combat cybercrime, any more than the KYC laws for traditional banking have been about combating illegal drug dealers. Rather, it’s all about control. Control how people spend and store their money, and make sure that everyone pays their “fair share” to the government’s extortion agents. Feed everyone’s financial information into the surveillance system to ensure that everyone stays in line and never disobeys government edicts, regardless of how ridiculous those edicts may be. Ensure that nobody ever dares to protest a government’s tyrannical dictates, and kill off all advocacy for freedom and liberty. If Incognito were to really incorporate the FATF standards, I can guarantee that all of these bad things will happen to Incognito users.

I have to believe that it would be better to make Incognito more resistant to government sanctions by continuing efforts to decentralize the network, and by strengthening user privacy rather than weakening it. Imagine, having so many nodes that the government would never be able to shut them all down. Better yet, imagine shifting to a proof-of-work model, using an ASIC-resistant algorithm. Using proof-of-work, rather than proof-of-stake, would make it way harder for governments and other bad actors to take control of the network. By going with proof-of-stake, the Incognito devs really set themselves up for bad things to happen. I would also suggest that the Incognito devs get together with the Dero and Equilibria devs, to see how they implement private smart contracts and private oracles on proof-of-work chains.

And, what about those criminals? Well, according to the figures that I’ve seen, the vast majority of Tornado Cash users were just normal people who were trying to protect their privacy. According to one source that I’ve seen, only about 17% of Tornado Cash users were actual criminals. Shutting down Tornado Cash isn’t going to deter those criminals, because they’ll just find other ways to launder their money. All that shutting down Tornado Cash has done is to punish normal people who want to ensure that their financial transactions remain private.

In my opinion, following the FATF standards will ruin this project, and will prompt me to withdraw my funds and to just give up on the project. My prediction is that many others will follow, and that Incognito will become a dead project. So, I hope that the Incognito devs will reconsider their stance on this issue.

pickle · 24 August 2022 21:09

i suppose this will determine the kind of privacy that incognito stands for. while i’m of the opinion that making compromises is a bit of a slippery slope (the definition of ‘legitimate’ is far too subjective and easily twisted in my opinion), i do understand where the team is coming from when it comes to matters of survival.

it’s a difficult topic for sure. so i’d like to first clarify a couple of points regarding incognito’s relationship to VASPs. apologies in advance for any misunderstanding on my part. will these memos will be required or optional for unshielding? if the feature is simply available for users who want to be compliant (and choose to interact with platforms that demand it), i don’t necessarily see a problem with that. however, having a choice is essential. though i’m not sure if this will help incognito stay out of whoever-is-currently-in-power’s ‘bad books’…

so, could you also help me understand - if mandatory for unshielding, then what happens to funds already inside the network (prior to this proposed implementation)? also, assuming everything in the incognito network continues to remain private, how does it work when exiting the network if funds are swapped for example? or are we suggesting that every internal tx prior should be linkable for the ‘authorized’?

regarding shielding, however - as we have seen with the tornado cash prank/statement, simply being an (unwitting) recipient of a ‘tainted’ tx is enough to have your funds flagged. plenty of regular people will be caught up in this - maybe even projects like incognito. i doubt regulators will stop at tornado cash. when that happens, will memos really be sufficient, or will more and more compromises have to be made? until proven otherwise, i believe that this project remains privacy-first. so what sort of compromises are we comfortable making before the whole exercise is pointless?

lastly, it looks like the travel rule only applies for transactions exceeding $1000. will this be the case for incognito also?

SPAddict25 · 24 August 2022 22:59

I agree with your line of thinking. I get the situation but privacy was always going to be a hot topic for regulators. You give an inch they take a mile. I agree with the team’s idea of a deterrence approach for bad actors but this is a very slippery slope and a difficult situation to navigate.

pickle · 25 August 2022 04:13

yep, and as we’ve seen multiple times throughout history, the definition of ‘bad actors’ is incredibly loose, as @donniet suggests. and it’s not a guarantee at all that according to whoever’s in charge, you’ll always remain on the right side of the ‘law’.

following Roe v. Wade for example, we’re already seeing suggestions that period tracking and fertility apps could be made to snitch on their users. so you have nothing to worry about and nothing to hide - until you do. imagine having funds frozen because you’ve forgotten to log a period, ha.

in my opinion, a better approach would be to make sure that there’s no information to give up. not collect more.

obsidian · 25 August 2022 09:59

totally agree with you @donniet, we have been waiting months for the Incognito team to put out this statement.

Privacy is a choice and people must be able to choose whether to reveal their secrets or not. Incognito should develop tools to help its users prove themselves to only the justice system in their society and no one else; instead of trying to please the fews that are power hungry and politically exposed people, by supporting the FATF you are “legitimately” taking political side which is what Incognito shouldn’t.

We urge the Incognito team to focus on making the network more decentralized and making the process of shield/unshield assets to/from the network as neutral as possible.

obsidian · 25 August 2022 10:06

Imagine when the FATF updated their compliance rules that require every Incognito users to submit their ViewingKey and OTAKey to proving their assets ‘legitimacy’ 24/7. bye bye privacy

brico84 · 25 August 2022 15:37

Can we all agree using Meme’s in this topic is not helpful in anyway?

Whatever your opinion, enough with the memes. We are trying to have a serious discussion here.

Also, i find it laughable that anyone thinks 17% is not a large amount of bad actors on a platform. While I have zero statistics to provide, I would be very uncomfortable supporting incognito if I knew 17% of its users were using it for money laundering and criminal activity.

Withholding my overall opinion at this point as I digest all this information and think on it, but wanted to put those 2 points out there.

brico84 · 25 August 2022 15:39

Oh and wherever we end up landing on this issue, I really appreciate the team taking time to think about and make proposals on how to address this issue one way or the other. It is not something to be ignored. In the end, whatever approach is taken, some people will be upset, and others will be happy (as the team has already pointed out)

Linnovations · 25 August 2022 18:57

Many thanks @incognito for raising this topic and opening it up for discussion and input from the community.

This is probably going to be one of my longest and most important replies I’ve post on this forum.

I feel very strongly about this topic as it is CRITICAL to the future of this project. I’ve read all the comments (thus far) and I would like to share my views.

I strongly support the idea above proposed by @donniet. I know it will be a huge undertaking to shift from PoS to PoW but this MUST happen if this project is serious about being decentralised and resistant to bad actors hijacking and taking control.

Migration to Proof of Work

Perhaps the team doesn't need to re-invent the wheel.

Would the team be open to leveraging the underlying security of a existing Proof-of-Work, ASIC-Resistant Privacy focussed blockchain?

I’m not a blockchain dev, nor a very technical person, so perhaps this idea is an impossibility or totally impractical, but could the Incognito Dev Team take a look at Wownero Blockchain (a fork of Monero)
Check out some blockchain stats here - https://freeboard.io/board/c8mM2c

It’s currently a Meme-coin but it could mature and change over time as more utility and use cases are built on it’s blockchain.

For those unfamiliar with this coin, here are some key attributes:

Privacy-first Focussed Community
Open Source Development
No Pre-mine
ASIC-Resistant PoW via CPU-only mining on general purpose PC hardware
No Pool Mining (this makes it resistant to Pool mining attacks)

Learn more here - https://wownero.org/

Could Incognito leverage Wownero and use it to secure the network from attacks and hijacking? If it’s not suitable, how about forking it and making the necessary tweaks? (but what do I know, I’m not a Dev so go easy on me please).

Compromising on Privacy

I also agree with what @pickle says below...

Once compromises are made, the project will be forever at the mercy of future compromises to remain compliant. This is a “Slippery slope”.

and like what @SPAddict25 says…

I foresee the project going into a death spiral of compliance updates that slowly but surely erodes the core value of this project being PRIVACY until the project is abandoned.

Migrating to a DAO (Decentralised Autonomous Organisation)

Has the Incognito Core Team considered a path towards becoming a DAO? I'm not saying this is essential but other companies have moved in this direction.

One such example is ShapeShift

Safety First

I care about the safety and livelihoods of every employee associated with this project.

We have an amazing team of talented Developers and Core Team members working on this project. We don’t want this (see below) to happen to anyone if this project gets targeted by the authorities :-

What measures (if any) are in place to conceal the identities of Incognito employees and ensure their safety?

The App needs to be freed from Big Tech

This is something that I feel needs urgent attention. Please make sure there is an .APK version of the app that works on De-Googled phones.
FYI: I’ve tested it on a GrapheneOS phone and it does not open at the moment. I have flagged this and there has not been any update.

What happens if Gov forces Big Tech to remove the Incognito App from the App Stores. Are we all screwed as all our cryptos will be inaccessible?
If so, what’s the backup way for us to access our crypto?

How can we decide on Compliance I.E. Travel Rule etc?

I foresee a lot of debate around these issues and it will be difficult to get concensus.

If a DAO were to be created, the community could vote on which compliance related projects/upgrades get implemented by the Core Devs.

This would allow the community to decide what information we may want to give up to be compliant with AML and Travel Rule regulations. But if you want my thoughts on this, I could not have said it any better than @pickle below…

Finally I wanted to echo @brico84’s point that “this is something not to be ignored”. With the recent shut down of Tornado Cash, a similar fate could be around the corner for this project. Hence why I think this is a major priority.

Given what’s happened to Tornado Cash, do you think it’s best to reduce the Growth Marketing Activity until a clear plan of action is outlined to protect the developers and core members of this project. Following that, I feel there needs to be a plan to address other attack vectors that could force the shutdown of this project.

In Closing

Sorry for this super long comment, but let me close by sharing this...

The reason why I’m here and have been supporting this project by running some vNodes (My very 1st post - https://we.incognito.org/t/step-by-step-how-i-built-a-virtual-node-on-worlds-smallest-mini-pc/6479 ) is because I strongly believe that PRIVACY is a basic human right.

I feel this project is CRITICAL to humanity and I want future generations to be able to Buy, Sell, Trade and Earn Yield on Cryptocurrencies with their privacy in tact.

duc · 26 August 2022 11:55

Hi guys, much appreciated for your thoughts. It is a big help for the core dev team.

We’d like to clarify a few points in our proposed action plan to ensure we’re all on the same page.

Your privacy will remain the same after the proposed code changes are deployed.
The only change we’re proposing here is a new feature (“disclosure key”) that allows Incognito users to show their funds’ origin to someone – when they want to.

It’s a personal choice. Incognito users may choose whether to disclose their funds’ origin to a 3rd party or not. That’s entirely up to them. They and only themselves can “opt-in” to reveal a “disclosure key” to a 3rd party.

Incognito does not take on any other actions (such as customer due diligence, transaction monitoring, record keeping, and suspicious transaction report), since they are the responsibilities of the 3rd parties.
Incognito simply provides a product feature that gives Incognito users a choice.
Network decentralization remains a crucial part of our development roadmap. The proposed action plan does not take us away from this focus. As stated in the Q3 roadmap, we’re working toward reducing the fixed node dominance to 34%. Incognito was one of the very first blockchains that launched a fully-sharded blockchain (in 2019). It’s difficult when you’re early and it takes time to research, design, and build it right. But we are on the right track. Incognito is one of the very few cryptonetworks that are powered by almost 3,000 nodes worldwide, thanks to our validator community!

In addition, reducing reliance on the core team’s operation for tools (e.g., mobile app, website, etc.) will be another vital step toward decentralization. For example, all codes are open source; you will be able to build your own Android apk or browser extension, host the web on IPFS for the swap and operate your own backend services for relaying requests or information back and forth between the tools and the network.
Migration to a DAO model is a common practice of many crypto projects. Starting a DAO is easy; there are already many good tools out there. But doing a DAO “right” is very difficult. Are we doing quadratic voting? What about privacy-preseving voting? Should we implement temperature check like Uniswap governance model? Which network parameters can be voted and adjusted via voting? There are many problems that we need to work through. And we want to be thoughtful about it. Our plan is to work on the Incognito DAO after we ship the key development priorities for network decentralization.

Thanks for sharing your thoughts in the previous comments. We do need more input from the community so that we can come up with better ideas and make sensible decisions - together.

pickle · 26 August 2022 15:27

thank you very much for your clarification @duc!

so does this mean the incognito wallet will prompt you only if you are unshielding to a destination that requires it?

you mentioned the only change would be the disclosure key. is this still on the cards?

do you mean here that users will have to provide information when they make shielding requests? and when you say incognito should be compliant with the travel rule - based on your clarification, i’m now assuming that you mean you will support users who choose to interact with platforms that follow it, not that incognito will implement it also (aka participate in broad information collection and active sharing)?

could you explain how this tool will work? i assume this is the disclosure key mentioned? what exactly am i able to disclose?

this kind of goes over my head, sorry. could you clarify?

i understand that when you interact with external networks (deposit, withdraw), you’re no longer private. but regarding trade… are we referring to actions taken within the incognito exchange?

again, appreciate you taking the time to clarify the original post. it’s good to have something concrete to work with beyond vague legalese, so we can discuss what the changes could actually be, and what they will mean for the user in practice.

obsidian · 27 August 2022 07:59

@duc thanks for your clarification, I would like to add a few more questions:

Is there a way to flag a dirty-coin (dirty money that criminal intentionally sent to my account or I don’t know who sent it to me) on the app so that it not using that coin when create transaction and exclude it from the balance?

What this “necessary information” include? Is it unique to every transactions? If someone include the same “encrypted memo” but on a different transaction, how can I prove that I have no idea what on the other transaction?

Linnovations · 27 August 2022 15:39

Hey @duc and/or @incognito,

Please arrange a video call.

As this is such a major and critically important issue, I’d like to suggest the incognito team put together a slide deck presentation and arrange a video call to walk us through the proposed solution and how these solutions address the Travel Rule and other issues hence preventing this platform from being terminated like Tornado Cash?

What does the community think of this request?
If you like this idea, please give it a

Linnovations · 28 August 2022 17:52

Thanks for taking the time to publish this @duc.

Firstly, I’d like to share with the community the 3 main reasons why I love the Incognito Network:

I wanted to be part of a PRIVACY FIRST COMMUNITY and support a project that values this basic Human Right to Privacy.
I wanted to be a PROUD OWNER in a tiny piece of this vast network by running a Node. Through my small stake I feel I’m helping decentralise and adds security to the very same network that I’m storing my crypto on.
I wanted a SELF-CUSTODY (Not your Keys, Not your coins) WALLET that allows me to buy, sell, trade and earn yield with 100% privacy.

But with the recent crackdown on Tornado Cash, I feel I need some reassurance from the Incognito Core team on the following scenarios/concerns:

If the App is no longer available in the App Stores (due to government sanctions), are there alternative ways to access our wallets to withdraw our coins?
If the Incognito website is forced to shutdown by Government ruling and this community forum shuts down, what are the ways we can reach the incognito core team for support and help?
Is the Incognito network decentralised enough to withstand an attack by the Govt.? If not, how much more time is needed until it become like a UniSwap?
If your DNS provider is issued with a government demand to delete the Incognito.org DNS record, how will this impact the functionality within the Incognito app? Will we still be able to deposit, withdraw, trade, shield and unshield etc?
If the company that pays the Dev Team are forces to close up shop, is the code open sourced so that another team can carry things forward?
If my coins are locked up in “Earn” and “Provide” features within the app, is the only way to exit out of these smart contracts is via the Incognito app? If that’s the case, what happens if the App is pulled from App stores, does this mean we will not be able to exist the smart contracts?
How decentralised is the Shielding & Unshielding processes? Is this a centralise process that could be shut down by Govt authorities thus locking up all our funds?

I ask these questions not to scare newcomers or existing community members.

I ask these questions with the hope that some of the developers on the Core team may realise that time spent on building cross-chain bridges may not be as important as addressing some shortcoming in some of the above scenarios.

Given what has happened to Tornado Cash, I’m very concerned and I look forward to some answers to my above questions.

NOTE TO THE COMMUNITY
I’m not a developer and not a very tech savvy person.
I most likely have missed many other potential attack vectors that could hurt or terminate this project resulting in the lock up of our funds on the platform. Please feel free to chime in with your thoughts and concerns.

Jared · 28 August 2022 21:36

Hello @Linnovations,

Thank you for your questions! Questions like these are healthy to a growing community and can help to ease the tensions that currently surround the uneasiness of privacy coins.

Yes, right now we have a CLI available for anyone to interact, trade, shield, unshield, etc without using a mobile app at all.

You can read our forum post regarding this:

Or check out the full command list on our GitHub page:

github.com

incognitochain/incognito-cli/blob/development/commands.md

There are two options for you to run the Incognito CLI by:
1. Downloading the pre-compiled executable binary file, you can find it in the [releases](https://github.com/incognitochain/incognito-cli/releases).
2. Compiling your own executable binary file from source as in the Installation instruction above.

Then execute the binary file with the following commands.

```shell
$ incognito-cli help
NAME:
   incognito-cli - A simple CLI application for the Incognito network

USAGE:
   incognito-cli [global options] command [command options] [arguments...]

VERSION:
   v1.0.0

DESCRIPTION:
   A simple CLI application for the Incognito network. With this tool, you can run some basic functions on your computer to interact with the Incognito network such as checking balances, transferring PRV or tokens, consolidating and converting your UTXOs, transferring tokens, manipulating with the pDEX, shielding or un-shielding ETH/BNB/ERC20/BEP20, etc.

This file has been truncated. show original

This all depends on which government you’re referring to. Incognito has core team members located in various parts of the world, with the majority being based in Vietnam. A total website shutdown would be highly unlikely. Other platforms for communication currently exist like Telegram and our Twitter page. We might open more in the future.

This question is too broad to be answered with a yes or no. Anything can be attacked with enough dedication. With that being said, Incognito is safer than majority of cryptocurrency projects since our focus is on decentralization, we have a CLI program anyone can use, and our code is open-source.

There are many many DNS providers out there. If (the US government) were able to have DNS providers block Incognito.org that would most likely only apply to US DNS providers.

Incognito is a decentralized collective of individuals all working together on the mission of privacy in cryptocurrency. Our GitHub has all of the code (even the website) freely open for anyone to download, review, etc.

Earn is on chain and Provide is off chain. What is the difference? Earn interacts directly with the blockchain and Provide relies on the Incognito backend services.

Regarding the app being pulled please see my answer above.

Shielding and Unshielding are decentralized and can be done via the Incognito-CLI (see above).

duc · 31 August 2022 05:06

Thanks for your constructive questions, let’s explore more about them here…

Regarding the compliance tool with “disclosure key”, let’s look into the following illustration to see how the proposed compliance tool works:

When Peter has to deal with a 3rd party (a VASP or an auditor for example), he can opt-in to reveal his “disclosure key” to the 3rd party.

Since Incognito uses Ring Signature, with the “disclosure key”, the 3rd party can determine which coin in a ring was used for the unshield (tx4) then decrypt the memo attached to the coin. The decrypted memo contains a “disclosure key” that allows the 3rd party continually to determine which actual coin in a ring that Alice used to create tx3 and it also allows decrypting the memo attached to the coin. Similarly, the decrypted memo contains a “disclosure key” that allows determining which actual coin in a ring that Bob used to create tx2 that was originally generated from the tx1 (shielding) so the 3rd party can now determine the funds that Peter has in his public address, is originally from Bob’s public address.

As you can see in the illustrated workflow, Incognito is not a VASP and therefore, does not involve in the tasks that a VASP like Binance and Coinbase perform. Incognito only provides a tool for Incognito users to be able to prove their funds’ origin to a 3rd party, and again that’s entirely up to them, they do that at their choice.

Regarding questions about decentralization, we’ve addressed most of them in our previous response:

About the Incognito network, working on shard & beacon decentralization remains a crucial part of our development roadmap, we’re trying our best to make the network as decentralized as possible.
About the mobile app, users always have alternatives to interact with the network and smart contracts (for moving funds out) such as website (WIP), RPC call, CLI, etc. Also, all source codes are open so another team can always carry things forward as needed.

Crypto is still in a grey regulatory area now. Every crypto project out there has a certain level of decentralization itself but regardless of the level it is, we believe they would always want to be compliant if possible as long as the actions taken to be compliant are not opposed to their core values. That’s true to Incognito as well, we are trying to keep Incognito as a safe place for users who value privacy to be via the proposed actions (aside decentralization efforts).

Hopefully, our responses could help elaborate more for the proposed two actions (deterrence shielding and Travel Rule’s compliance tool) and we actually need your support so that together we can build a safe and more robust privacy platform. Thank you!

Klex · 31 August 2022 17:49

There’s a lot to say about this, but If I tried I’d be mostly repeating what others have already said. To save everybody’s time I’ve decided to post a link to this video. I think it is very relevant to what’s going on. https://youtu.be/QA3YZVDUN5s

KNZ · 12 March 2023 19:55

Very glad to have found this thread. I read Eric Hughes’ “A Cyberpunk’s Manifesto.” While I agree with most of his points (privacy is a lynchpin to an open society…), I thought his distinction between “a secret” (“something one doesn’t want anybody to know”) and privacy (“the power to selectively reveal oneself to the world”) was semantic and possibly disingenuous. Rather, to me privacy entails my prerogative to decide what I want to keep secret and whether or not to divulge my identity or the particulars of my transactions. The latter without the former, to me, is NOT privacy.

But what’s crucial to me–and, no, I can’t speak for others–is not being coerced and controlled by powerful others who perceive crypto as a threat to the status quo. I don’t see how a community can on the one hand respect users’ privacy while on the other hand partaking in the intrusive surveillance schemes of the status quo which others above have, and I agree with them, identified as a means primarily of control. Many of the laws coalescing today are designed to do the opposite of safeguarding users’ privacy. They’re designed to give powerful entities absolute access to the plebes’ most critical survival resources–including removing access to them. I don’t believe compromise on this matter is possible.

I’m grateful for this thread, for the community administrators’ honesty about where they stand on the issue, and for other community members raising crucial points. And I think I have now the information I need to decide how to move forward.