Chelsea Manning: Crypto’s Privacy Problem Depends on Improving Its Technology

Chelsea Manning, the former U.S. Army private who spent seven years in prison for one of the largest leaks of documents in military history, sees at least one positive outcome to the collapse of crypto exchange FTX: more awareness about transparency.

Manning, now a security consultant for privacy startup Nym, told CoinDesk TV’s “First Mover” program on Tuesday that the fall of FTX and now the arrest of former CEO Sam Bankman-Fried opens the door to a wider discussion about privacy and transparency.

“There is a chance now, given this discussion, to innovate in a way to ensure that you know where your assets are,” Manning said. She added that it would also mean users would be able to “verify that this is in fact coming from a person who is authenticated, who is valid [and] who has reputation.”

Read more: FTX Founder Sam Bankman-Fried Formally Charged With Conspiracy, Fraud in US Court

The former Army intelligence analyst is known for leaking roughly half a million documents related to the Iraq and Afghanistan wars, bringing to light what the military really knew about civilian casualties. Now a self-proclaimed “skeptic of digital assets,” Manning noted that people may have taken crypto’s inherently transparent nature at face value and drummed up “assumptions” about the technology.

“The truth is people have been jumping to the gun on some of the expectations,” Manning said, adding that participants in crypto are only now beginning to understand the technology and the underlying problems it has as it relates to privacy.

According to Manning, FTX’s implosion will likely stir Congress to act with new rules.

“Regulation is coming,” she said. “Whether it’s the SEC [Securities and Exchange Commission] or Congress or the European Union, regulation is coming. This is a reality. The crypto space is going to have regulation coming.”

However, said Manning, it is necessary that crypto-based platforms have a way of verifying information for users on their own, “outside of the regulatory space,” in an effort to avoid "just replicating what the [Federal Reserve] is or replicating what FTX was.”

“There are some fundamental aspects of the technology that are interesting,” she said. She added that the “technical aspects of cryptography and being able to verify information in order to be able to provide for your privacy in the future” are under development.

Read more: Chelsea Manning on the Sad State of Online Privacy