27 ms·

Infrastructure bill cryptocurrency surveillance provision is a privacy disaster

426 points by abecedarius 5y ago

verdverm 5y ago
It's hard to take the EFF seriously with their word choices of late
- xunn0026 5y ago
  I have just read the article and the title is spot on. It's a digital law hidden in a law about highways and it is a privacy and regulatory disaster.
  - chrisco255 5y ago
    I believe crypto industry lobbyists got concessions on this earlier today, but I could be wrong. I wish there was a way to restrict these massive catch all bills that include everything in one package so that it's impossible to debate on a case by case basis.
    - dannyw 5y ago
      Link/source to your first claim?
      - chrisco255 5y ago
        Reddit link, but sources included here: https://www.reddit.com/r/ethfinance/comments/owtmn1/cryptocurrency_in_the_infrastructure_bill_the/ https://www.reddit.com/r/ethfinance/comments/owtmn1/cryptocu...
        flyingfences 5y ago
        The "concessions" are the wording included in the OP. It used to be even worse.
  - IfOnlyYouKnew 5y ago
    It's not a "digital law", because I have no idea what that's supposed to mean. It's not "hidden". It's part of a law. Same font size as the rest. Everyone newspaper is writing about it. The law isn't about "highways". It's about infrastructure. And these provisions, specifically, are one of the attempts to raise the funds financing the investments specified in that law.
  - verdverm 5y ago
    I read the article and was referring to the use of words in the body like "surveillance" for a one time collection of required KYC information. It has more "thrilling" words as well. But generally, over the years the EFF has lost my support and is viewed as yet another fringe voice with eccentric overtones.
1cvmask 5y ago
This is more than a privacy disaster. It is so far so vaguely worded (maybe deliberately?) that the government can target everyone in the ecosystem with penalties: While the language is still evolving, the proposal would seek to expand the definition of “broker” under section 6045(c)(1) of the Internal Revenue Code of 1986 to include anyone who is “responsible for and regularly providing any service effectuating transfers of digital assets” on behalf of another person. These newly defined brokers would be required to comply with IRS reporting requirements for brokers, including filing form 1099s with the IRS. That means they would have to collect user data, including users’ names and addresses. The broad, confusing language leaves open a door for almost any entity within the cryptocurrency ecosystem to be considered a “broker”—including software developers and cryptocurrency startups that aren’t custodying or controlling assets on behalf of their users. It could even potentially implicate miners, those who confirm and verify blockchain transactions. The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.
- hkt 5y ago
  "forced to surveil their users" Or as it is otherwise known, abide by the same KYC rules as banks. I'd guess the vague wording is to allow regulators and the judiciary to respond flexibly to changing practices. It might be broad but it isn't poor lawmaking: it does exactly as it intends to. Even using brokerage as an analogy makes sense to respond to a system in which by design almost everyone of significance is a middleman of some kind. Fundamentally this is what will allow bitcoin to thrive: this is part of the process of becoming legitimised. It isn't what the crypto-libertarians hoped for, but what they hoped for in the beginning was endless deflation, untaxable income and speculative gains. It wasn't good for anyone but them. This is a step to something better, namely a new financial system in which upstarts are able to enter quickly and on technical merit alone. That is worth a lot, and won't happen without bitcoin entering the regulated mainstream.
  - KingOfCoders 5y ago
    It's basically the same with the GDPR, it talks more about principles than companies or technologies to be able to adapt to a fast changing field - which I appreciate as a citizen but as an implementor I prefer the checklists of PCIDSS which are not vague.
onelastjob 5y ago
I agree that this provision is a disaster and will force a lot of cryptocurrency startups to incorporate outside of the US and also not offer their services to US customers. It's a real shame. The government should be able to get enough data for tax compliance just by making fiat on-ramps and off-ramps (aka exchanges) implement KYC (know your customer) rules.
- BLKNSLVR 5y ago
  > making fiat on-ramps and off-ramps (aka exchanges) implement KYC (know your customer) rules. That's already the case for most exchanges, and they also log trades and provide these logs to both individuals and taxation entities for EoY tax reporting purposes. The "problem" is that once you've converted fiat into crypto, you can use decentralized exchanges, and trade back and forth ad infinitum with no traceability. This is a problem because every single trade (crypto to crypto) is considered a taxable event, and on a decentralized exchange or centralized exchange that doesn't do KYC, there are no tax-specific records and therefore such transactions are unlikely to be recorded. Many people bemoan that it would be fairer and easier to just apply tax at the time crypto is converted into, and then out of, fiat. But a lot of profit can be earnt by the individual in between those on- and off-ramps, including the potential for profits to go, pardon the pun, into the ether, never to be seen again (by the government at least). The crypto die-hards are also moving towards the lack of necessity to cash out to fiat, which would render the off-ramp taxation less effective. This may be why there's a specific focus on stable coins, as they eschew the need for converting back to fiat.
  - shanebrunette 5y ago
    I am the founder of CryptoTaxCalculator.io and I am not sure where the idea of non traceability on DEXs comes from. Aggregating the transaction history is absolutely possible, all we need is the public wallet address. The real black box is around certain international exchanges that don’t keep appropriate transaction records.
    - BLKNSLVR 5y ago
null0pointer 5y ago
This particular instance is a disaster, no doubt, but the real issue is the bundling of completely unrelated provisions into single bills. It's absurd.
- Havoc 5y ago
  Not only is it absurd it seems to be a core part of how these bill get negotiated cross party
- parineum 5y ago
  This is a symptom of a symptom of a symptom. Congress, essentially, only passes one bill a year now, the budget. That's the case because everything else requires 60 votes because of the filibuster rules. Filibuster rules were changed because Obama wanted the affordable care act. Standing in the way of that was the Tea Party, the group of Republicans that don't negotiate. I'm going to both sides this one because we now have the counterpart to that on the left with the progressives. There exists a segment of both parties that refuse to negotiate from their ideologies. This makes sure that neither party is capable of passing legislation unless they have a super majority not including that wing of the party. The infrastructure bill is one of the very few things that can break this because the centrists of both parties do actually like it quite a bit, they just have to dog and pony hating each other before they get it done. That and war. We can all agree on war.
  - mschuster91 5y ago
    > There exists a segment of both parties that refuse to negotiate from their ideologies. This makes sure that neither party is capable of passing legislation unless they have a super majority not including that wing of the party. And there is a root cause at the bottom of all this dysfunctionality: FPTP voting and gerrymandering that always converges into a two-party system with most districts being "solid red" or "solid blue", leaving only a handful of (highly contested) "swing states/districts" to squabble over.
    - asdff 5y ago
phase5 5y ago
There is a newer more comprehensive one which is worse for privacy https://www.coindesk.com/new-crypto-bill-in-us-congress-is-the-most-comprehensive-yet https://www.coindesk.com/new-crypto-bill-in-us-congress-is-t...
lvs 5y ago
This is unenforceable. Some of the relevant open source projects are being developed by contributors based outside the US who have no possibility of knowing whether the address receiving coins in a transaction is controlled by someone based in the US. It's not even possible within the design of bitcoin and related cryptocurrencies for developers to add such tracking provisions, since the generation of an address is algorithmic and can be done with pen and paper. If indeed the law is as the EFF describes it, it must have been written by someone with zero technical knowledge about cryptocurrency. This is not a viable regulatory approach. The implementation is not cognizable -- and therefore is not enforceable.
- KingOfCoders 5y ago
  Then these open source developers should be careful to attend conferences in the US.
  - trasz 5y ago
    Except that US bullies other countries to persecute people who ignore US sanctions.
pavlov 5y ago
The downsides listed are just cryptocurrency lobbyist talking points. “Require new surveillance of everyday users of cryptocurrency;” What everyday users? There’s nothing you can do with this stuff except speculate, gamble and build obfuscated Ponzis. ”Force software creators and others who do not custody cryptocurrency for their users to implement cumbersome surveillance systems or stop offering services in the United States;” Not offering these services seems like a positive outcome. ”Create more honeypots of private information about cryptocurrency users that could attract malicious actors;” Losing your money to malicious actors is a standard part of the crypto experience already. Endless scams and ransomware don’t seem to worry the author. ”Create more legal complexity to developing blockchain projects or verifying transactions in the United States—likely leading to more innovation moving overseas.” Ah, blockchain innovation, which is somehow so vital to the shining future of mankind, yet has utterly failed to produce anything of technological or economic value with the billions already invested. Overseas sounds like a fine place to continue this pseudoinnovation charade.
- colechristensen 5y ago
  >has utterly failed to produce anything of technological or economic value with the billions already invested. Overseas sounds like a fine place to continue this pseudoinnovation charade. One quiet place where blockchain makes sense is shared ledgers between large financial institutions, JPMorgan for example is working a lot on this. It's not about privacy or usurping the social order or whatever imaginative solution to all of society's problems that gets attached to so many other things... it's just a better API between institutions for transferring ownership between themselves, which is a frequent and often awkward (and ancient) tech. With blockchain you don't need a third party, with big institutions "theft" doesn't make sense. If there is an error and a transaction needs to be reversed it's in everybody's interest to do so and expected to happen from time to time and likely a built in feature. Simplifying way back end transactions between banks is pretty nice... for banks, but pretty uninteresting to most people because it's just about settling daily balances between institutions and the like which is really boring.
  - pavlov 5y ago
jasiek 5y ago
This is how you deal with an existential threat to USD.
- trophycase 5y ago
  What? USD is already the dominant stablecoin. The US should be jumping for joy that they will remain the universal fiat even through the blockchain age. When Uniswap removed a bunch of coins from their front end, guess what they removed? sAUD, sEUR... but not sUSD. Very interesting don't you think?
  - cinquemb 5y ago
    > When Uniswap removed a bunch of coins from their front end I invite everyone to clone/fork (i've removed the google analytics stuff and emptied the black lists and made uniswap-info use the hashrouter): https://github.com/cinquemb/uniswap-info/ https://github.com/cinquemb/uniswap-info/ (deployed at https://cinquemb.github.io/uniswap-info https://cinquemb.github.io/uniswap-info) and https://github.com/cinquemb/uniswap-interface https://github.com/cinquemb/uniswap-interface (deployed at https://cinquemb.github.io/uniswap-interface https://cinquemb.github.io/uniswap-interface) To deploy yourselves you can (on gh, you can also run it locally): yarn install yarn build mkdir dist cd dist/ cp -R ../build/* . git add -A git commit -m "GH pages" git push -f git@github.com:[your account]/uniswap-info.git master:gh-pages
- telxos 5y ago
  3. Tether 7. USD Coin 10. Binance USD Crypto seems rather reliant on USD. The crypto narratives are always so flimsy.
  - elevenoh 5y ago
    Projects bringing USD's value - namely globally credible & low-volatility price denomination - into crypto doesn't mean crypto is 'reliant on' USD.
- IfOnlyYouKnew 5y ago
  Ha! I hadn't seen this particular paranoia-mixed-with-delusions-of-grandiosity for a while. In the first year or so of Bitcoin, the community was absolutely obsessed with the idea that "the Fed's" will come for them, to protect the mighty dollar. They were also certain they could withstand such efforts, since their fancy tech operated outside the reaches of the law. They were wrong on both counts: "the establishment" didn't react with aggressive attempts to shut them down, but really just some mild interest mixed with a bit of amusement. Only when, after a decade+, it had been proven beyond any doubt that the technology isn't useful for anything anyone cares about, and when it became more salient that the energy usage and the scale of fraud were growing out of control did they start pushing back. And with every single startup in the sector operating within the confines of law and the existing financial markets, there is absolutely no doubt that the law can regulate and/or shut down the industry within any reasonable meaning of the term.
AndyMcConachie 5y ago
I'm tired of having to care about digital currencies and I really don't care if the people working with them get treated unfairly. It's a solution in search of a problem and I'm tired of people who otherwise don't know shit about technology constantly asking me about it. Digital currencies have solved none of our social problems, and will never solve any of our social problems. Instead they're just a giant distraction, or worse a not so clever means of facilitating sophmoric scams on the ignorant.
- mypastself 5y ago
  Even if you think they’re criminals, why wouldn’t you want them to get treated fairly? What other types of crimes do you think deserve unfair treatment?
- ivan_gammel 5y ago
  I would add to this that they created more problems than solved. Negative environmental impact, criminal activities, robbery of unqualified investors — all that for a few geeks to have a false feeling of privacy.
- CryptoPunk 5y ago
  How could you not care if people are treated unfairly? This is not a good baseline value that we can all share. Are we all going to hope that other people, who disagree with us on some social or business issue, are treated unfairly? Is politics going to be relegated to a forum to wage a never-ending battle against each other? How about live and let live?
  - aww_dang 5y ago
    Apparently for many here, subjective interpretations of "social good" trump the basic premises of voluntary interactions and natural law. Contrast those views with decentralized and non-violent valuations provided by voluntary consumption.
    - CryptoPunk 5y ago
eingaeKaiy8ujie 5y ago
Why do we allow some clueless, incompetent old dicks to make laws like this? Governments are too powerful. This system has to change. The role of a government has to be reduced to a minimum. Hopefully we'll get there in the next 200-300 years.
- chrisan 5y ago
  because more people vote for them
CryptoPunk 5y ago
Another problem is making "digital asset" the object of the regulatory restriction, which is so vague that it could include not only anything on the blockchain, but plenty of non-monetary digital items outside the blockchain too. It should specify digital currencies, because that is the only type of digital asset for which you find comparable regulations in the financial sector.
- jl2718 5y ago
  Then they’d have to define it as currency and they can’t tax purchases made with currency.
- maccolgan 5y ago
  classifying it as an currency rather than an asset is akin to IRS committing suicide
lobochrome 5y ago
Not talking about the specific implementation but the question is: Privacy for whom? Do we need the „innovation“ of untraceable money? For instance, we decided to get rid of untraceable cell phone numbers (at least in Germany you can’t get a cell without ID) and - nothing changed for the worse, but arguably some things changed for the better. Why would we introduce that for money/payment flows?
- CryptoPunk 5y ago
  >>Do we need the „innovation“ of untraceable money? Yes. We need untraceable money. Controlling how people use money is tantamount to controlling all of their economic interactions. Surveilling how people use their money means becoming privy to their most intimate interactions. This is mass-surveillance, of everything (because money touches everything), being snuck through the backdoor. With the transition from physical to digital currencies, we've created surveillance systems the likes of which the world has never seen. The information collection being done on the population is being done by a tiny proportion of the population, and disproportionately benefiting the political elite. Hyper-centralization exacerbates income and power disparities, and I would bet any money it leads to a more fragile social order. https://twitter.com/SpencerKSchiff/status/1252761285776859137 https://twitter.com/SpencerKSchiff/status/125276128577685913... >>In the last 20 years of available data, real median household income of Washington, D.C.’s residents has increased by 66.11%. For the entire country, the 20-yr increase is only 5.23%. This trend of widening disparity has accelerated dramatically since the Great Recession’s onset. We need the more distributed configuration of power that historically existed, and that can only happen if the privacy that is characteristic of physical currencies is imparted upon digital currencies.
  - pjc50 5y ago
    Untraceable money is far more likely to lead to centralization of power, because it allows the already wealthy to act unaccountably. >>In the last 20 years of available data, real median household income of Washington, D.C.’s residents has increased by 66.11%. For the entire country, the 20-yr increase is only 5.23%. With untraceable money you'd never know this. Or you'd have to limit yourself to "declared income", which would be effectively voluntary.
shapefrog 5y ago
Since when was a public ledger of financial transactions anything but a privacy disaster?
- chrisan 5y ago
  how do I tie this public ledger to an individual?
  - counternotions 5y ago
    Here’s an example of sleuthing the public ledger to uncover some high profile scammers: https://www.youtube.com/watch?v=3Xw9rWmTQfc&feature=youtu.be https://www.youtube.com/watch?v=3Xw9rWmTQfc&feature=youtu.be
rvz 5y ago
It's like they want to push everyone to use privacy coins at this point. Even if this passes succeeds, it helps the privacy coins anyway. Just wait until the BTC maximalists realise that BTC is traceable and not private.
oliwarner 5y ago
Isn't this just an attempt to bring crypto in line with existing money-laundering rules? Don't $10k+ money movements already trigger IRS notifications? I know that's a bit whatabouttery but if we want to legitimise blockchain payments, we have to do more to kick organised crime and tax evaders out. Pretending that absolute privacy is always best is a criminal wet dream. Waves goodbye to his karma
- davidcbc 5y ago
  The vast majority of cryptocurrency advocates are speculators that don't want to legitimize blockchain payments, they only want the number to go up. Criminal activity has been shown over and over to be the only "legitimate" use case of cryptocurrency, so if you eliminate that the number might go down.
  - jl2718 5y ago
    I’m sure you are speaking for yourself here with such authority.
marsven_422 5y ago
You all cheered when they silenced orange man bad..what did expect would happen next?
bob33212 5y ago
I don't know why the crypto people expected anything else. They though that the government would just say: "Well since you have this cool new anonymous database technology we will just let you make billions of dollars and not tax it" Even more ridiculous is that 3rd world countries with sketchy governments are going to let their citizens move their money in and out of crypto.
- jl2718 5y ago
  Not a lot of people are actually making money. That would require conversion back to fiat. Nor are they buying goods and services. Basically they’re just getting taxed on worthless trades between fake assets. The price goes up when money comes in. It goes down when money goes out. It’s up because people are losing money, not gaining it. This is tautological.
yawaworht1978 5y ago
A very good point was mentioned here, the miners. Is it possible to ID miners? Are they subject to kyc and taxes? I mean , they are generating revenue and distributing/creating assets. Upon mining, how long is the mined coin anonymous?
- dylkil 5y ago
  Anyone can buy an asic and turn it on to start mining. The mined coin stays anon as long as the miner has good opsec.
  - yawaworht1978 5y ago
    Can he simply convert it to cash via local Bitcoin? Another thing I wonder, is having an ASIC a guarantee to mine something? I mean new coins/partial coins, not transaction processing.
    - dylkil 5y ago
      There are plenty of ways to convert to cash anon Most miners join pools. A single asic will never mine a block, so miners pool hashpower together and you get paid out your share of the hashpower.
      - yawaworht1978 5y ago
        thanks, curious to hear about the Anom ways of conversion and do they get paid in fiat or Satoshi s typically?
user-the-name 5y ago
Good! The sooner cryptocurrencies die, the better. The damage they are doing to society right now is immense, and it will only grow larger if they are not stopped.
- deleted 5y ago
  [deleted]
henearkr 5y ago
I usually side with the EFF, but here going at total war against cryptocurrencies seems right to me. I don't see any scientific or technological application that could benefit humanity and would be developed from blockchain technology. I tried very hard to figure out uses for the hash machines once the cryptocurrencies will disappear, but sadly I could think of none. All of this silicon, these PCBs, will just be junk.
- api 5y ago
  It's precisely when people feel this way about things that large chunks of our civil liberties are forfeit. Precedents: the war on drugs, crusades against porn, alcohol prohibition, the war on terror, mandatory minimum sentencing, etc. It's a lynch mob mentality writ large and allows reckless legislators and police to gallop right over all kinds of civil boundaries that very much exist for a reason. A much narrower set of solutions could address your concerns: a tax on proof of work mining, a ban on the sale of hardware whose sole purpose is cryptocurrency mining, or a ban on domestic exchanges converting money to/from cryptocurrencies that use high-resource proof of work mechanisms. I see no reason to ban proof of stake or other consensus mechanism cryptocurrencies, and stepping up enforcement of existing KYC/AML regulations would help fight money laundering. I also must point out that real estate, sham art auctions, sham investments and businesses, and numerous other mechanisms collectively account for the vast bulk of all money laundering. Cryptocurrency is a niche player. It's also a niche player in the street drug market where the vast majority of transactions use physical cash. As far as bubbles and speculative manias go... it's legal for an adult to buy a lotto ticket (that is run by the state!) or go to a casino (permitted and regulated by the state). This is no worse. I might support raising taxes on short term speculative sorts of financial games, but those would also need to be applied to high frequency trading and speculative games run by hedge funds in conventional markets. Those are much larger than anything in crypto. I say all this as a mostly cryptocurrency skeptic.
  - arrosenberg 5y ago
    You can’t compare bitcoin to porn, gambling, drugs and alcohol. Bitcoin is the only one that doesn’t affect dopamine levels in the brain, and that virtually no one would seek out if it was suddenly illegal.
dylkil 5y ago
Why is hacker news so salty about cryptocurrency
- robot_no_419 5y ago
  Lots of tech nerds are upset that they understand technology but not finance and economics.
- MelonTree 5y ago
  HN tends to be very skeptical in general. It's easy to sound intelligent with a well-reasoned negative opinion than it is with an optimistic one. I think with cryptocurrency in particular a lot of HN'ers have really just dug their heals in and don't want to admit they were wrong.
- Sargos 5y ago
  HN folks on the iPod: "No wireless. Less space than a Nomad. Lame." Tech forums have always been fairly anti-technology and dislike anything new until the rest of society fully adopts it.
- colinmhayes 5y ago
  Cryptocurrency is currently causing more harm to society than good. PoW is a large reason for that, but even PoS will have huge negative impacts as it is mostly used for speculating and illegal activity. It doesn't solve any problems other than ones that are better solved by VPNs.
  - rantwasp 5y ago
    Okay. Let’s play the: X is causing more harm to society than good. X=guns Are guns causing more harm than good? Should we ban guns? X=religion. Is religion causing more harm than good? Should we ban any form of religion? X=social media. Is social media causing more harm than good? I heard Facebook consumes more power than the entire state of Argentina! Should we ban Facebook? X=USD the dollar. 95% of criminal activity uses USD. 95%! It’s clear to me that if no dollar we could prevent a lot of criminal activity. Should we ban the USD? X=VPNs Used to circumvent local laws!!! Are the causing more harm than good? Ban VPNs you say?
fredgrott 5y ago
Let's see: A Public keychain IS no the implied definition by itself not privacy based? I just do not see how more tracking on public info somewhat gives us less privacy when we did not have privacy on public keychain in the first place!
shiado 5y ago
Anybody who has followed cryptocurrency in the last year knows that major US financial institutions and hedge funds have become heavily involved. The regulations coming are entirely to do with making the legal burdens of individual custody onerous enough that users place their coins on completely centralized exchanges to manage legal risk, all so these institutions have access to these coins for manipulation purposes like borrowing for shorting. The ONLY regulation you will see is on the average user so they can suck up coins like Daniel Plainview drinking your milkshake, NOT on market manipulation or trading habits of institutions which is the key driver of malicious activity and harm in the cryptocurrency space.
- dcolkitt 5y ago
  I agree that the end effect will be largely what you suggest: aggregate activity in large institutions at the expense of smaller startups and decentralized protocols. But from talking to people in the space, it seems that most of the large exchanges and hedge funds are vigorously oppose to this law. Bryan Armstrong (the CEO of Coinbase) has repeatedly and publicly criticized the bill. I'll cite Hanlon's Razor: Never attribute to malice what can be explained by incompetence. I think this is simply the result of what happens when we decide our government should be run by a bunch of octogenarian lawyers, most of whom's tech knowledge ends at their ability to reset their WiFi router. Is it really that surprising that Biden, Schumer, Portman, McConnell, Yellen, Pelosi, etc. have no understanding about how crypto works? They were all born before the charge card was even invented.
- meowface 5y ago
  >NOT on market manipulation or trading habits of institutions which is the key driver of malicious activity and harm in the cryptocurrency space. How much evidence is there of major institutions acting maliciously in the cryptocurrency space, and the scale of the impact? I'm sure there's likely quite a bit of market manipulation from some people or entities who hold a lot of cryptocurrency assets, but as much as I despise finance and financial institutions (of pretty much any kind), I also want to know who to hate even more, if applicable. (Not asking in a rhetorical or contrarian or skeptical way; genuinely trying to understand who's accused of what and why. And excluding Tether, since we all know the accusations, there, and the comment seems to be directed at major US financial institutions that were huge long before Bitcoin was created, if I understand correctly.)
dogman144 5y ago
If this passes, which I think it will in some form, I believe the main impact will be a long-ish period of doublespeak between policy language and ability to enforce, eventually resolving in the end of the policy. This sounds so similar to the crypto (encryption) wars in the 90's: a general sense, but not actual understanding of how <cryptocurrencies/consumer encryption> actually works, but a desire to regulate it because the new tech fundamentally upends current approaches to the privacy and freedom of access to <spending/communications> in a digital forum. Overall, I've been cautiously optimistic on how a regulatory situation like this would go, once it actually launched, after hearing politicians like Sen Warner/Wyden talk about tech the last few years. However, I suppose the industry should have seen this coming after the recent Sen Warren "shadowy coders" comment about bitcoin core, and similar pushes from the UST across two admins. The crux: > “responsible for and regularly providing any service effectuating transfers of digital assets” KYC for all these entities, which almost sounds like it could include home routers, is technically impossible. Similarly to banning exports of a math proof (the crypto wars). USBs also enable transfer of digital assets. So do printers, if you go full cold wallet. Will USBs, home routers, and printers that I buy on amazon require my KYC/AML? I say that not to highlight how nonsensical this law is, but to highlight that this won't be enforceable. If they do try to enforce it, I bet it will be as an umbrella authorization to go after the miners, and.... we'll see what happens to crypto, as that's a dangerous threat to hashpower. If crypto survives a situation like that though in the short term, my sense is the regulation would drop away in the mid term, similar to the encryption regs in the 90s.
- GoblinSlayer 5y ago
  It can be a justification for addition of backdoors. If backdoors don't help, it's okay, they can be used for other purposes.
- dcolkitt 5y ago
  This is my sense as well. Congress will pass overly broad language, then the actual regulators who actually have to put in place will be like "what the fuck? how do we even conform to this?". Regulators will most likely issue exemptions year-after-year and basically say "we're not going to enforce this year, but next year you guys really better have your stuff in line" This is almost exactly how the individual health insurance mandate worked in the ACA. Ten years later, it's never been enforced a single time. It just gets waived, year after year.
htlbx 5y ago
This is what you wanted democrats. You people are pure fucking evil.
bacan 5y ago
Wait till you guys find out about the FACTA/CRS requirements.
bawana 5y ago
so is tax avoidance the real benefit in transacting with crypto?
jl2718 5y ago
I didn’t read the bill, but here is the summary: “We’re going to use violence against non-violence.”
therealbilly 5y ago
It's one thing for the US government to surveil people using dollars. Dollars are fiat currency issued by the United States. Generally speaking, governments have long controlled the manner in which citizens use fiat currency...for good or evil. Bitcoin is not issued by the US government. Bitcoin is not under US government control. Therefore, the government has no nexus or connection to Bitcoin. Meaning the government should not be able to put restrictions on something that they did not issue or control according to first principles. Obviously the government is attempting to overrun existing case law and establish a dubious level of control over Bitcoin. We should remember that governments control their citizens by many means, and that includes how they use fiat money.
exabrial 5y ago
Please call them out by name or it'll never be stopped. Your blind loyalty to your political party is how these disasters happen. (And for the record I'm taking both red and blue, as they were both responsible for the disasters like DMCA)
glennvtx 5y ago
The chief promise of this technology is to take back the power of money from the governments, a great advance in human rights. Regulation is antithetical to their initial purpose. There is simply no need for it, it is a power grab, to continue the status quo, nothing more.

426 points by abecedarius 5y ago

verdverm 5y ago

It's hard to take the EFF seriously with their word choices of late

xunn0026 5y ago
I have just read the article and the title is spot on. It's a digital law hidden in a law about highways and it is a privacy and regulatory disaster.
- chrisco255 5y ago
  I believe crypto industry lobbyists got concessions on this earlier today, but I could be wrong. I wish there was a way to restrict these massive catch all bills that include everything in one package so that it's impossible to debate on a case by case basis.
  - dannyw 5y ago
    Link/source to your first claim?
    - chrisco255 5y ago
      Reddit link, but sources included here: https://www.reddit.com/r/ethfinance/comments/owtmn1/cryptocurrency_in_the_infrastructure_bill_the/ https://www.reddit.com/r/ethfinance/comments/owtmn1/cryptocu...
      - flyingfences 5y ago
        The "concessions" are the wording included in the OP. It used to be even worse.
- IfOnlyYouKnew 5y ago
  It's not a "digital law", because I have no idea what that's supposed to mean. It's not "hidden". It's part of a law. Same font size as the rest. Everyone newspaper is writing about it. The law isn't about "highways". It's about infrastructure. And these provisions, specifically, are one of the attempts to raise the funds financing the investments specified in that law.
- verdverm 5y ago
  I read the article and was referring to the use of words in the body like "surveillance" for a one time collection of required KYC information. It has more "thrilling" words as well. But generally, over the years the EFF has lost my support and is viewed as yet another fringe voice with eccentric overtones.

1cvmask 5y ago

This is more than a privacy disaster. It is so far so vaguely worded (maybe deliberately?) that the government can target everyone in the ecosystem with penalties: While the language is still evolving, the proposal would seek to expand the definition of “broker” under section 6045(c)(1) of the Internal Revenue Code of 1986 to include anyone who is “responsible for and regularly providing any service effectuating transfers of digital assets” on behalf of another person. These newly defined brokers would be required to comply with IRS reporting requirements for brokers, including filing form 1099s with the IRS. That means they would have to collect user data, including users’ names and addresses. The broad, confusing language leaves open a door for almost any entity within the cryptocurrency ecosystem to be considered a “broker”—including software developers and cryptocurrency startups that aren’t custodying or controlling assets on behalf of their users. It could even potentially implicate miners, those who confirm and verify blockchain transactions. The mandate to collect names, addresses, and transactions of customers means almost every company even tangentially related to cryptocurrency may suddenly be forced to surveil their users.

hkt 5y ago
"forced to surveil their users" Or as it is otherwise known, abide by the same KYC rules as banks. I'd guess the vague wording is to allow regulators and the judiciary to respond flexibly to changing practices. It might be broad but it isn't poor lawmaking: it does exactly as it intends to. Even using brokerage as an analogy makes sense to respond to a system in which by design almost everyone of significance is a middleman of some kind. Fundamentally this is what will allow bitcoin to thrive: this is part of the process of becoming legitimised. It isn't what the crypto-libertarians hoped for, but what they hoped for in the beginning was endless deflation, untaxable income and speculative gains. It wasn't good for anyone but them. This is a step to something better, namely a new financial system in which upstarts are able to enter quickly and on technical merit alone. That is worth a lot, and won't happen without bitcoin entering the regulated mainstream.
- KingOfCoders 5y ago
  It's basically the same with the GDPR, it talks more about principles than companies or technologies to be able to adapt to a fast changing field - which I appreciate as a citizen but as an implementor I prefer the checklists of PCIDSS which are not vague.

onelastjob 5y ago

I agree that this provision is a disaster and will force a lot of cryptocurrency startups to incorporate outside of the US and also not offer their services to US customers. It's a real shame. The government should be able to get enough data for tax compliance just by making fiat on-ramps and off-ramps (aka exchanges) implement KYC (know your customer) rules.

BLKNSLVR 5y ago
> making fiat on-ramps and off-ramps (aka exchanges) implement KYC (know your customer) rules. That's already the case for most exchanges, and they also log trades and provide these logs to both individuals and taxation entities for EoY tax reporting purposes. The "problem" is that once you've converted fiat into crypto, you can use decentralized exchanges, and trade back and forth ad infinitum with no traceability. This is a problem because every single trade (crypto to crypto) is considered a taxable event, and on a decentralized exchange or centralized exchange that doesn't do KYC, there are no tax-specific records and therefore such transactions are unlikely to be recorded. Many people bemoan that it would be fairer and easier to just apply tax at the time crypto is converted into, and then out of, fiat. But a lot of profit can be earnt by the individual in between those on- and off-ramps, including the potential for profits to go, pardon the pun, into the ether, never to be seen again (by the government at least). The crypto die-hards are also moving towards the lack of necessity to cash out to fiat, which would render the off-ramp taxation less effective. This may be why there's a specific focus on stable coins, as they eschew the need for converting back to fiat.
- shanebrunette 5y ago
  I am the founder of CryptoTaxCalculator.io and I am not sure where the idea of non traceability on DEXs comes from. Aggregating the transaction history is absolutely possible, all we need is the public wallet address. The real black box is around certain international exchanges that don’t keep appropriate transaction records.
  - BLKNSLVR 5y ago

null0pointer 5y ago

This particular instance is a disaster, no doubt, but the real issue is the bundling of completely unrelated provisions into single bills. It's absurd.

Havoc 5y ago
Not only is it absurd it seems to be a core part of how these bill get negotiated cross party
parineum 5y ago
This is a symptom of a symptom of a symptom. Congress, essentially, only passes one bill a year now, the budget. That's the case because everything else requires 60 votes because of the filibuster rules. Filibuster rules were changed because Obama wanted the affordable care act. Standing in the way of that was the Tea Party, the group of Republicans that don't negotiate. I'm going to both sides this one because we now have the counterpart to that on the left with the progressives. There exists a segment of both parties that refuse to negotiate from their ideologies. This makes sure that neither party is capable of passing legislation unless they have a super majority not including that wing of the party. The infrastructure bill is one of the very few things that can break this because the centrists of both parties do actually like it quite a bit, they just have to dog and pony hating each other before they get it done. That and war. We can all agree on war.
- mschuster91 5y ago
  > There exists a segment of both parties that refuse to negotiate from their ideologies. This makes sure that neither party is capable of passing legislation unless they have a super majority not including that wing of the party. And there is a root cause at the bottom of all this dysfunctionality: FPTP voting and gerrymandering that always converges into a two-party system with most districts being "solid red" or "solid blue", leaving only a handful of (highly contested) "swing states/districts" to squabble over.
  - asdff 5y ago

phase5 5y ago

There is a newer more comprehensive one which is worse for privacy https://www.coindesk.com/new-crypto-bill-in-us-congress-is-the-most-comprehensive-yet https://www.coindesk.com/new-crypto-bill-in-us-congress-is-t...

lvs 5y ago

This is unenforceable. Some of the relevant open source projects are being developed by contributors based outside the US who have no possibility of knowing whether the address receiving coins in a transaction is controlled by someone based in the US. It's not even possible within the design of bitcoin and related cryptocurrencies for developers to add such tracking provisions, since the generation of an address is algorithmic and can be done with pen and paper. If indeed the law is as the EFF describes it, it must have been written by someone with zero technical knowledge about cryptocurrency. This is not a viable regulatory approach. The implementation is not cognizable -- and therefore is not enforceable.

KingOfCoders 5y ago
Then these open source developers should be careful to attend conferences in the US.
- trasz 5y ago
  Except that US bullies other countries to persecute people who ignore US sanctions.

pavlov 5y ago

The downsides listed are just cryptocurrency lobbyist talking points. “Require new surveillance of everyday users of cryptocurrency;” What everyday users? There’s nothing you can do with this stuff except speculate, gamble and build obfuscated Ponzis. ”Force software creators and others who do not custody cryptocurrency for their users to implement cumbersome surveillance systems or stop offering services in the United States;” Not offering these services seems like a positive outcome. ”Create more honeypots of private information about cryptocurrency users that could attract malicious actors;” Losing your money to malicious actors is a standard part of the crypto experience already. Endless scams and ransomware don’t seem to worry the author. ”Create more legal complexity to developing blockchain projects or verifying transactions in the United States—likely leading to more innovation moving overseas.” Ah, blockchain innovation, which is somehow so vital to the shining future of mankind, yet has utterly failed to produce anything of technological or economic value with the billions already invested. Overseas sounds like a fine place to continue this pseudoinnovation charade.

colechristensen 5y ago
>has utterly failed to produce anything of technological or economic value with the billions already invested. Overseas sounds like a fine place to continue this pseudoinnovation charade. One quiet place where blockchain makes sense is shared ledgers between large financial institutions, JPMorgan for example is working a lot on this. It's not about privacy or usurping the social order or whatever imaginative solution to all of society's problems that gets attached to so many other things... it's just a better API between institutions for transferring ownership between themselves, which is a frequent and often awkward (and ancient) tech. With blockchain you don't need a third party, with big institutions "theft" doesn't make sense. If there is an error and a transaction needs to be reversed it's in everybody's interest to do so and expected to happen from time to time and likely a built in feature. Simplifying way back end transactions between banks is pretty nice... for banks, but pretty uninteresting to most people because it's just about settling daily balances between institutions and the like which is really boring.
- pavlov 5y ago

jasiek 5y ago

This is how you deal with an existential threat to USD.

trophycase 5y ago
What? USD is already the dominant stablecoin. The US should be jumping for joy that they will remain the universal fiat even through the blockchain age. When Uniswap removed a bunch of coins from their front end, guess what they removed? sAUD, sEUR... but not sUSD. Very interesting don't you think?
- cinquemb 5y ago
  > When Uniswap removed a bunch of coins from their front end I invite everyone to clone/fork (i've removed the google analytics stuff and emptied the black lists and made uniswap-info use the hashrouter): https://github.com/cinquemb/uniswap-info/ https://github.com/cinquemb/uniswap-info/ (deployed at https://cinquemb.github.io/uniswap-info https://cinquemb.github.io/uniswap-info) and https://github.com/cinquemb/uniswap-interface https://github.com/cinquemb/uniswap-interface (deployed at https://cinquemb.github.io/uniswap-interface https://cinquemb.github.io/uniswap-interface) To deploy yourselves you can (on gh, you can also run it locally): yarn install yarn build mkdir dist cd dist/ cp -R ../build/* . git add -A git commit -m "GH pages" git push -f git@github.com:[your account]/uniswap-info.git master:gh-pages
telxos 5y ago
3. Tether 7. USD Coin 10. Binance USD Crypto seems rather reliant on USD. The crypto narratives are always so flimsy.
- elevenoh 5y ago
  Projects bringing USD's value - namely globally credible & low-volatility price denomination - into crypto doesn't mean crypto is 'reliant on' USD.
IfOnlyYouKnew 5y ago
Ha! I hadn't seen this particular paranoia-mixed-with-delusions-of-grandiosity for a while. In the first year or so of Bitcoin, the community was absolutely obsessed with the idea that "the Fed's" will come for them, to protect the mighty dollar. They were also certain they could withstand such efforts, since their fancy tech operated outside the reaches of the law. They were wrong on both counts: "the establishment" didn't react with aggressive attempts to shut them down, but really just some mild interest mixed with a bit of amusement. Only when, after a decade+, it had been proven beyond any doubt that the technology isn't useful for anything anyone cares about, and when it became more salient that the energy usage and the scale of fraud were growing out of control did they start pushing back. And with every single startup in the sector operating within the confines of law and the existing financial markets, there is absolutely no doubt that the law can regulate and/or shut down the industry within any reasonable meaning of the term.

AndyMcConachie 5y ago

I'm tired of having to care about digital currencies and I really don't care if the people working with them get treated unfairly. It's a solution in search of a problem and I'm tired of people who otherwise don't know shit about technology constantly asking me about it. Digital currencies have solved none of our social problems, and will never solve any of our social problems. Instead they're just a giant distraction, or worse a not so clever means of facilitating sophmoric scams on the ignorant.

mypastself 5y ago
Even if you think they’re criminals, why wouldn’t you want them to get treated fairly? What other types of crimes do you think deserve unfair treatment?
ivan_gammel 5y ago
I would add to this that they created more problems than solved. Negative environmental impact, criminal activities, robbery of unqualified investors — all that for a few geeks to have a false feeling of privacy.
CryptoPunk 5y ago
How could you not care if people are treated unfairly? This is not a good baseline value that we can all share. Are we all going to hope that other people, who disagree with us on some social or business issue, are treated unfairly? Is politics going to be relegated to a forum to wage a never-ending battle against each other? How about live and let live?
- aww_dang 5y ago
  Apparently for many here, subjective interpretations of "social good" trump the basic premises of voluntary interactions and natural law. Contrast those views with decentralized and non-violent valuations provided by voluntary consumption.
  - CryptoPunk 5y ago

eingaeKaiy8ujie 5y ago

Why do we allow some clueless, incompetent old dicks to make laws like this? Governments are too powerful. This system has to change. The role of a government has to be reduced to a minimum. Hopefully we'll get there in the next 200-300 years.

chrisan 5y ago
because more people vote for them

CryptoPunk 5y ago

Another problem is making "digital asset" the object of the regulatory restriction, which is so vague that it could include not only anything on the blockchain, but plenty of non-monetary digital items outside the blockchain too. It should specify digital currencies, because that is the only type of digital asset for which you find comparable regulations in the financial sector.

jl2718 5y ago
Then they’d have to define it as currency and they can’t tax purchases made with currency.
maccolgan 5y ago
classifying it as an currency rather than an asset is akin to IRS committing suicide

lobochrome 5y ago

Not talking about the specific implementation but the question is: Privacy for whom? Do we need the „innovation“ of untraceable money? For instance, we decided to get rid of untraceable cell phone numbers (at least in Germany you can’t get a cell without ID) and - nothing changed for the worse, but arguably some things changed for the better. Why would we introduce that for money/payment flows?

CryptoPunk 5y ago
>>Do we need the „innovation“ of untraceable money? Yes. We need untraceable money. Controlling how people use money is tantamount to controlling all of their economic interactions. Surveilling how people use their money means becoming privy to their most intimate interactions. This is mass-surveillance, of everything (because money touches everything), being snuck through the backdoor. With the transition from physical to digital currencies, we've created surveillance systems the likes of which the world has never seen. The information collection being done on the population is being done by a tiny proportion of the population, and disproportionately benefiting the political elite. Hyper-centralization exacerbates income and power disparities, and I would bet any money it leads to a more fragile social order. https://twitter.com/SpencerKSchiff/status/1252761285776859137 https://twitter.com/SpencerKSchiff/status/125276128577685913... >>In the last 20 years of available data, real median household income of Washington, D.C.’s residents has increased by 66.11%. For the entire country, the 20-yr increase is only 5.23%. This trend of widening disparity has accelerated dramatically since the Great Recession’s onset. We need the more distributed configuration of power that historically existed, and that can only happen if the privacy that is characteristic of physical currencies is imparted upon digital currencies.
- pjc50 5y ago
  Untraceable money is far more likely to lead to centralization of power, because it allows the already wealthy to act unaccountably. >>In the last 20 years of available data, real median household income of Washington, D.C.’s residents has increased by 66.11%. For the entire country, the 20-yr increase is only 5.23%. With untraceable money you'd never know this. Or you'd have to limit yourself to "declared income", which would be effectively voluntary.

shapefrog 5y ago

Since when was a public ledger of financial transactions anything but a privacy disaster?

chrisan 5y ago
how do I tie this public ledger to an individual?
- counternotions 5y ago
  Here’s an example of sleuthing the public ledger to uncover some high profile scammers: https://www.youtube.com/watch?v=3Xw9rWmTQfc&feature=youtu.be https://www.youtube.com/watch?v=3Xw9rWmTQfc&feature=youtu.be

rvz 5y ago

It's like they want to push everyone to use privacy coins at this point. Even if this passes succeeds, it helps the privacy coins anyway. Just wait until the BTC maximalists realise that BTC is traceable and not private.

oliwarner 5y ago

Isn't this just an attempt to bring crypto in line with existing money-laundering rules? Don't $10k+ money movements already trigger IRS notifications? I know that's a bit whatabouttery but if we want to legitimise blockchain payments, we have to do more to kick organised crime and tax evaders out. Pretending that absolute privacy is always best is a criminal wet dream. Waves goodbye to his karma

davidcbc 5y ago
The vast majority of cryptocurrency advocates are speculators that don't want to legitimize blockchain payments, they only want the number to go up. Criminal activity has been shown over and over to be the only "legitimate" use case of cryptocurrency, so if you eliminate that the number might go down.
- jl2718 5y ago
  I’m sure you are speaking for yourself here with such authority.

marsven_422 5y ago

You all cheered when they silenced orange man bad..what did expect would happen next?

bob33212 5y ago

I don't know why the crypto people expected anything else. They though that the government would just say: "Well since you have this cool new anonymous database technology we will just let you make billions of dollars and not tax it" Even more ridiculous is that 3rd world countries with sketchy governments are going to let their citizens move their money in and out of crypto.

jl2718 5y ago
Not a lot of people are actually making money. That would require conversion back to fiat. Nor are they buying goods and services. Basically they’re just getting taxed on worthless trades between fake assets. The price goes up when money comes in. It goes down when money goes out. It’s up because people are losing money, not gaining it. This is tautological.

yawaworht1978 5y ago

A very good point was mentioned here, the miners. Is it possible to ID miners? Are they subject to kyc and taxes? I mean , they are generating revenue and distributing/creating assets. Upon mining, how long is the mined coin anonymous?

dylkil 5y ago
Anyone can buy an asic and turn it on to start mining. The mined coin stays anon as long as the miner has good opsec.
- yawaworht1978 5y ago
  Can he simply convert it to cash via local Bitcoin? Another thing I wonder, is having an ASIC a guarantee to mine something? I mean new coins/partial coins, not transaction processing.
  - dylkil 5y ago
    There are plenty of ways to convert to cash anon Most miners join pools. A single asic will never mine a block, so miners pool hashpower together and you get paid out your share of the hashpower.
    - yawaworht1978 5y ago
      thanks, curious to hear about the Anom ways of conversion and do they get paid in fiat or Satoshi s typically?

user-the-name 5y ago

Good! The sooner cryptocurrencies die, the better. The damage they are doing to society right now is immense, and it will only grow larger if they are not stopped.

deleted 5y ago
[deleted]

henearkr 5y ago

I usually side with the EFF, but here going at total war against cryptocurrencies seems right to me. I don't see any scientific or technological application that could benefit humanity and would be developed from blockchain technology. I tried very hard to figure out uses for the hash machines once the cryptocurrencies will disappear, but sadly I could think of none. All of this silicon, these PCBs, will just be junk.

api 5y ago
It's precisely when people feel this way about things that large chunks of our civil liberties are forfeit. Precedents: the war on drugs, crusades against porn, alcohol prohibition, the war on terror, mandatory minimum sentencing, etc. It's a lynch mob mentality writ large and allows reckless legislators and police to gallop right over all kinds of civil boundaries that very much exist for a reason. A much narrower set of solutions could address your concerns: a tax on proof of work mining, a ban on the sale of hardware whose sole purpose is cryptocurrency mining, or a ban on domestic exchanges converting money to/from cryptocurrencies that use high-resource proof of work mechanisms. I see no reason to ban proof of stake or other consensus mechanism cryptocurrencies, and stepping up enforcement of existing KYC/AML regulations would help fight money laundering. I also must point out that real estate, sham art auctions, sham investments and businesses, and numerous other mechanisms collectively account for the vast bulk of all money laundering. Cryptocurrency is a niche player. It's also a niche player in the street drug market where the vast majority of transactions use physical cash. As far as bubbles and speculative manias go... it's legal for an adult to buy a lotto ticket (that is run by the state!) or go to a casino (permitted and regulated by the state). This is no worse. I might support raising taxes on short term speculative sorts of financial games, but those would also need to be applied to high frequency trading and speculative games run by hedge funds in conventional markets. Those are much larger than anything in crypto. I say all this as a mostly cryptocurrency skeptic.
- arrosenberg 5y ago
  You can’t compare bitcoin to porn, gambling, drugs and alcohol. Bitcoin is the only one that doesn’t affect dopamine levels in the brain, and that virtually no one would seek out if it was suddenly illegal.

dylkil 5y ago

Why is hacker news so salty about cryptocurrency

robot_no_419 5y ago
Lots of tech nerds are upset that they understand technology but not finance and economics.
MelonTree 5y ago
HN tends to be very skeptical in general. It's easy to sound intelligent with a well-reasoned negative opinion than it is with an optimistic one. I think with cryptocurrency in particular a lot of HN'ers have really just dug their heals in and don't want to admit they were wrong.
Sargos 5y ago
HN folks on the iPod: "No wireless. Less space than a Nomad. Lame." Tech forums have always been fairly anti-technology and dislike anything new until the rest of society fully adopts it.
colinmhayes 5y ago
Cryptocurrency is currently causing more harm to society than good. PoW is a large reason for that, but even PoS will have huge negative impacts as it is mostly used for speculating and illegal activity. It doesn't solve any problems other than ones that are better solved by VPNs.
- rantwasp 5y ago
  Okay. Let’s play the: X is causing more harm to society than good. X=guns Are guns causing more harm than good? Should we ban guns? X=religion. Is religion causing more harm than good? Should we ban any form of religion? X=social media. Is social media causing more harm than good? I heard Facebook consumes more power than the entire state of Argentina! Should we ban Facebook? X=USD the dollar. 95% of criminal activity uses USD. 95%! It’s clear to me that if no dollar we could prevent a lot of criminal activity. Should we ban the USD? X=VPNs Used to circumvent local laws!!! Are the causing more harm than good? Ban VPNs you say?

fredgrott 5y ago

Let's see: A Public keychain IS no the implied definition by itself not privacy based? I just do not see how more tracking on public info somewhat gives us less privacy when we did not have privacy on public keychain in the first place!

shiado 5y ago

Anybody who has followed cryptocurrency in the last year knows that major US financial institutions and hedge funds have become heavily involved. The regulations coming are entirely to do with making the legal burdens of individual custody onerous enough that users place their coins on completely centralized exchanges to manage legal risk, all so these institutions have access to these coins for manipulation purposes like borrowing for shorting. The ONLY regulation you will see is on the average user so they can suck up coins like Daniel Plainview drinking your milkshake, NOT on market manipulation or trading habits of institutions which is the key driver of malicious activity and harm in the cryptocurrency space.

dcolkitt 5y ago
I agree that the end effect will be largely what you suggest: aggregate activity in large institutions at the expense of smaller startups and decentralized protocols. But from talking to people in the space, it seems that most of the large exchanges and hedge funds are vigorously oppose to this law. Bryan Armstrong (the CEO of Coinbase) has repeatedly and publicly criticized the bill. I'll cite Hanlon's Razor: Never attribute to malice what can be explained by incompetence. I think this is simply the result of what happens when we decide our government should be run by a bunch of octogenarian lawyers, most of whom's tech knowledge ends at their ability to reset their WiFi router. Is it really that surprising that Biden, Schumer, Portman, McConnell, Yellen, Pelosi, etc. have no understanding about how crypto works? They were all born before the charge card was even invented.
meowface 5y ago
>NOT on market manipulation or trading habits of institutions which is the key driver of malicious activity and harm in the cryptocurrency space. How much evidence is there of major institutions acting maliciously in the cryptocurrency space, and the scale of the impact? I'm sure there's likely quite a bit of market manipulation from some people or entities who hold a lot of cryptocurrency assets, but as much as I despise finance and financial institutions (of pretty much any kind), I also want to know who to hate even more, if applicable. (Not asking in a rhetorical or contrarian or skeptical way; genuinely trying to understand who's accused of what and why. And excluding Tether, since we all know the accusations, there, and the comment seems to be directed at major US financial institutions that were huge long before Bitcoin was created, if I understand correctly.)

dogman144 5y ago

If this passes, which I think it will in some form, I believe the main impact will be a long-ish period of doublespeak between policy language and ability to enforce, eventually resolving in the end of the policy. This sounds so similar to the crypto (encryption) wars in the 90's: a general sense, but not actual understanding of how <cryptocurrencies/consumer encryption> actually works, but a desire to regulate it because the new tech fundamentally upends current approaches to the privacy and freedom of access to <spending/communications> in a digital forum. Overall, I've been cautiously optimistic on how a regulatory situation like this would go, once it actually launched, after hearing politicians like Sen Warner/Wyden talk about tech the last few years. However, I suppose the industry should have seen this coming after the recent Sen Warren "shadowy coders" comment about bitcoin core, and similar pushes from the UST across two admins. The crux: > “responsible for and regularly providing any service effectuating transfers of digital assets” KYC for all these entities, which almost sounds like it could include home routers, is technically impossible. Similarly to banning exports of a math proof (the crypto wars). USBs also enable transfer of digital assets. So do printers, if you go full cold wallet. Will USBs, home routers, and printers that I buy on amazon require my KYC/AML? I say that not to highlight how nonsensical this law is, but to highlight that this won't be enforceable. If they do try to enforce it, I bet it will be as an umbrella authorization to go after the miners, and.... we'll see what happens to crypto, as that's a dangerous threat to hashpower. If crypto survives a situation like that though in the short term, my sense is the regulation would drop away in the mid term, similar to the encryption regs in the 90s.

GoblinSlayer 5y ago
It can be a justification for addition of backdoors. If backdoors don't help, it's okay, they can be used for other purposes.
dcolkitt 5y ago
This is my sense as well. Congress will pass overly broad language, then the actual regulators who actually have to put in place will be like "what the fuck? how do we even conform to this?". Regulators will most likely issue exemptions year-after-year and basically say "we're not going to enforce this year, but next year you guys really better have your stuff in line" This is almost exactly how the individual health insurance mandate worked in the ACA. Ten years later, it's never been enforced a single time. It just gets waived, year after year.

htlbx 5y ago

This is what you wanted democrats. You people are pure fucking evil.

bacan 5y ago

Wait till you guys find out about the FACTA/CRS requirements.

bawana 5y ago

so is tax avoidance the real benefit in transacting with crypto?

jl2718 5y ago

I didn’t read the bill, but here is the summary: “We’re going to use violence against non-violence.”

therealbilly 5y ago

It's one thing for the US government to surveil people using dollars. Dollars are fiat currency issued by the United States. Generally speaking, governments have long controlled the manner in which citizens use fiat currency...for good or evil. Bitcoin is not issued by the US government. Bitcoin is not under US government control. Therefore, the government has no nexus or connection to Bitcoin. Meaning the government should not be able to put restrictions on something that they did not issue or control according to first principles. Obviously the government is attempting to overrun existing case law and establish a dubious level of control over Bitcoin. We should remember that governments control their citizens by many means, and that includes how they use fiat money.

exabrial 5y ago

Please call them out by name or it'll never be stopped. Your blind loyalty to your political party is how these disasters happen. (And for the record I'm taking both red and blue, as they were both responsible for the disasters like DMCA)

glennvtx 5y ago

The chief promise of this technology is to take back the power of money from the governments, a great advance in human rights. Regulation is antithetical to their initial purpose. There is simply no need for it, it is a power grab, to continue the status quo, nothing more.