Why crypto creators want to remain anonymous | Technology/Tools

PARIS, Feb 19 – The two perennial friends from Florida never sought to be noticed, but then built a multi-million dollar empire selling digital art and people wanted to know who they were.

Under the pseudonyms “Gargamel” and “Gordon Goner,” they created the “Bored Ape Yacht Club,” a collection of 10,000 cartoon monkeys with different hairstyles and outfits.

They sell these as digital tokens (NFTs), and it’s now hard to get one for as little as $280,000 (RM1.1 million), thanks in part to celebrity endorsements such as Paris Hilton on Serena Williams.

The US outlet BuzzFeed did some research earlier this month and revealed their true identities, sparking a wave of anger among fans on social media.

“Doxing is ridiculous, it puts people at risk,” one Twitter user wrote, using Internet slang to identify someone against their will.

The story refocused attention on anonymity in the cryptocurrency world.

While the creators of “boring monkeys” may want to hide in the crypto world, they own a company called Yuga Labs, so they must follow all the usual rules for corporate filing, including providing specific beneficiaries.

“Using a pseudonym does not make you anonymous,” says Alexander Stachtenko, a cryptocurrency expert at KPMG.

risk of theft

It’s unclear why the founders of Bored Apes wanted to remain anonymous – they gave several interviews under pseudonyms.

Critics say anyone making money from NFTs would be wise to seek anonymity, as what they’re selling is worth nothing.

However, fans rejoice to be part of a community in which NFT ownership is often a gateway to games and other perks.

Either way, anyone who becomes dangerously wealthy in this field has obvious reasons for staying under the radar.

“I don’t need the crypto audience to know who I am, what I look like, and where I come from,” says a creator who calls himself a “moisture owl.”

“I don’t want to risk stealing people from me or hurting my family.”

He co-founded Yield Guild Games, a startup focused on NFT video games in the Philippines, where the NFT craze has spread among the people.

He points out that the technology that underpins cryptocurrencies and NFTs – the blockchain – is the ledger where anyone can track transactions.

Thus, connecting his encrypted and real identity will allow anyone to discover his fortune.

But the bigger the project, the more complex it is to remain anonymous.

“It becomes more difficult if you expand your team,” says Soona Amhaz of Volt Capital, a fund focused on cryptocurrency.

“the sweetest way”

One of my favorite ways to stay anonymous in the crypto world is to form a DAO (Decentralized Autonomous Organization).

DAOs allow people to cooperate and act like a business, primarily as shareholders, but without formal legal status or specific owners.

Anyone making profits still has to pay taxes, but connecting real-world individuals to these entities is a much more difficult task than digging through public records, for example, to uncover the founders of Bored Apes.

This model has served anonymous entrepreneurs well, from “Zeus,” the creator of cryptocurrency at Olympus, to “Code Monkey” who created the cryptocurrency for Port Finance.

However, many people use the expectation of anonymity for nefarious purposes.

DAOs and other decentralized entities are particularly vulnerable to fraud, according to the analysis firm Chainalysis.

AnubisDAO was one such entity, created by pseudonyms last October with little more than a Twitter account and logo.

It disappeared less than a day after its launch, withdrawing nearly $60 million in investor funds, according to Chainalysis.

And the tide seems to be turning against anonymity in the crypto world.

Most major cryptocurrency exchanges now require identity verification to combat this type of fraud.

But Soona Amhaz believes there are still positives to the DAO idea, arguing that it is controlled by blockchain.

Anyone can track certain DAO transactions and see if they are legitimate or suspicious.

She says there is another big benefit.

“If you’re a nickname, it doesn’t matter if you don’t go to the right school,” she says.

“It’s only your work and your reputation that gets valued. And it really is one of the fairest ways to rate someone. —AFP