The fundamentals that underpin the development of cryptography are conceptually comparable to those that underpin the imperative to safeguard the privacy of individuals. Several recent events in the United States point to the fact that this privacy may be in jeopardy, as the young business in question has the potential to offer an alternative to the existing monetary system.
The most recent information regarding a legislative procedure that started on June 12, 2023, can be found in a report compiled by Reason. The House Judiciary Committee of the United States Congress is looking into whether or not there was a violation of the privacy of their customers at major financial institutions in the country.
The government agency issued subpoenas to Citigroup, JPMorgan Chase, PNC Financial Services, Truist, Bankcorp, Wells Fargo, and Bank of America since it is suspected that these financial institutions "voluntarily" handed up information regarding their customers. In particular, the latter of these organizations is said to have assisted the Federal Bureau of Investigation (FBI) in identifying persons without going through the typical legal process.
Individuals who had previously purchased a firearm with a BoA product were apparently pushed to the top of the list. This was claimed in the report, which quoted an official declaration made by the House Judiciary Committee.
The investigation that the government has been conducting into Citibank and its operations relating to similar abuses is currently being expanded. Because these acts ignored important legal requirements, its customers' confidential information may have been jeopardized.
The analysis by Reason underlines the heightened surveillance of U.S. people since the passage of the PATRIOT Act, which may violate civil freedoms. The cozy relationship between financial institutions and the police is a worrying indicator.
SEC, TREASURY DEPARTMENT & DEPARTMENT OF JUSTICE ACTION
The steps taken by the Department of Justice (DOJ), the Department of Treasury, and the Securities and Exchange Commission (SEC) in the United States are still another signal. The Chief Legal Officer (CLO) of Coinbase, Paul Grewal, is quoted in the paper regarding the rising tensions between Coinbase and the SEC.
According to Grewal and others, the Commission has been regulating the cryptocurrency business with an "enforcement" strategy. In this regard, the executive was quick to point out the regulator's lack of specificity:
In a world where one's financial security and personal privacy are at risk of being compromised, cryptocurrency is the only feasible solution. On the other hand, regulators and other U.S. government agencies are working toward preventing citizens from accessing digital assets.
In addition to the actions taken by the SEC, the recent lawsuit brought by the Treasury against the Ethereum-based exchange Tornado Cash and its creators brings to light an unsettling reality: individuals can become a target for government institutions if they operate in a manner that is counterproductive to the interests of the state.
In the case of Tornado Cash, the United States appears willing to step over several boundaries to make the technology illegal. In a recent post, the Director of Research at Coincenter, Peter Van Valkenburgh, argues against the lawsuit and the sanctions that have been imposed on the site as well as its co-founders, Roman Storm, and Roman Semenov, stating that this is the case: (...) Sanctions and special measures can be imposed without any demonstration of probable cause, without a warrant, and in secret, typically accompanied by a gag order for the financial institution that was ordered to apply a particular prohibition on a special measure, and they are frequently imposed in this manner. This unrestrained investigation authority is incompatible with the liberties guaranteed by the Fourth Amendment. This was also the case with the KindHearts case.
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