A new partnership between Cardano and blockchain-based firm Coinfirm has drawn criticism from its community. The Cardano-Coinfirm partnership will enable authorities to track ADA transactions on the blockchain from as far back as when it was first created. This, according to the press release, will enable the apprehension of bad actors and prevent illegal transactions from being carried out on the platform. Complying with anti-money laundering (AML) regulations within regulations.
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Even though this move was made as a way to further the adoption of ADA by institutions, it has been seen as a form of betrayal by some in the community. The most prominent of these criticisms have been levied by Weiss Crypto, A subsidiary of Weiss Ratings, a leading financial rating firm.
Cardano Faces Criticism From Community
In a series of tweets, Weiss Crypto laid out its criticism of this move. It pointed out that excessive regulation is what killed the banking system. This is why people are so distrustful of the current banking systems and are turning to crypto. Now, Cardano is allowing the same regulations that crippled the banking system onto its ecosystem.
Weiss Crypto pointed out that this move would make the blockchain political. Also opening it up to censorship and network manipulation. A follow-up tweet said that this defeats the whole purpose of the freedom cryptocurrencies brings to the masses. Regulation like this would take away this freedom from control and repression from the people who already run current world financial systems.
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“This brings Cardano closer to becoming a censorship-prone, politicized, and manipulated network. If you’re going down this route, there are far better tools for the job – Facebook’s Diem, CBDCs, and the networks they’ll spring up.”
Weiss Crypto’s focus landed on the fact that AML laws are used to surveil the people. Making sure that they know what is happening in the financial markets at every turn. It then concluded by reiterating that this was an all-around bad and disappointing move.
Charles Hoskinson Responds To The Backlash
Cardano co-founder Charles Hoskinson took to Twitter to respond to these criticisms via video. The co-founder started out by stating that it [Cardano] is a totally agnostic protocol. Hence where a person is located doesn’t matter to it.
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Hoskinson said; “While the base layer of the system doesn’t care if you’re from the United States or Japan, wherever, what you can do is add identity and metadata, and all kinds of other things and those other things give you the ability to be in compliance with your business domain, regulated or otherwise.”
“They provide clarity,” Hoskinson said in regards to the partnership. “They provide a lot of business and technical requirements. And they allow us to make the software better for everyone everywhere, and Cardano to get more adoption in all industries, regulated and unregulated.”
ADA price back up above $2.8 | Source: ADAUSD on TradingView.com
ADA is currently still trading above its previous all-time high. The coin which had successfully clenched 3rd position for largest crypto by market cap has continued to maintain its upward momentum. Currently trading at $2.58.
Featured image from CryptoSlate, chart from TradingView.com