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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 en

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.
- dragonwriter 5y ago
  > 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. That is incorrect; it was in place and the shared responsibility penalty applied on taxes if the mandate was not adhered to from when it became effective in 2014 through 2018, but not after that because it was repealed by the Tax Cut and Jobs Act. It was never “waived”.
jcranmer 5y ago
> Will USBs, home routers, and printers that I buy on amazon require my KYC/AML? Of course not. Those are products not services. Let's break down the statement in detail: > digital assets This is something I'd expect to be defined in the definitions section of the act. Even if it's not, the most reasonable interpretation is going to be something along the lines of any digital product whose ownership can be traded for material value gain, which would include cryptocurrencies, NFTs, and possibly MMO virtual currencies. There's definitely a lot of gray area in defining digital assets, but pretending that word documents and the like are digital assets is intentionally misreading the law. > effectuating transfers The plain definition of "effectuate" is "to bring about" or some other variation that specifically implies a causal link. To effectuate something requires that the agent itself is causing it to happen. Mere incidental participation wouldn't be sufficient. If I tell someone to take $1000 out of my ATM in cash and send it to somebody else in the mail, the person who is following my instructions is effectuating the transaction; the post office is not. > providing any service As mentioned above, we are specifically restricting this only to entities that are providing services, not products. So people whose roles are limited to providing products (such as software developers) are not affected by this rule. > responsible for and regularly providing And said services have to be provided on more than a one-off basis. So even the example I gave earlier of ordering someone to move money around wouldn't qualify; the person basically has to be willing to do this on an ongoing purpose, essentially as their business model, for this provision to kick in. In other words, the people who are affected by this are going to be those who are offering banking-like services for digital assets (e.g., cryptocurrencies, NFTs, WoW gold). Pedestrian things like routers and USBs are completely unaffected. The assertion of a sibling comment that software developers are potentially at risk is equally asinine. The people who are affected are the cryptocurrency exchanges, probably services like cryptocurrency tumblers, possibly miners or companies that operate MMOs.
- dogman144 5y ago
  It sounds like you have a much better handle on the law’s terminology in application than the industry groups and legal /regulatory teams do, which is good.
- donmcronald 5y ago

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.

dragonwriter 5y ago
> 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. That is incorrect; it was in place and the shared responsibility penalty applied on taxes if the mandate was not adhered to from when it became effective in 2014 through 2018, but not after that because it was repealed by the Tax Cut and Jobs Act. It was never “waived”.

jcranmer 5y ago

> Will USBs, home routers, and printers that I buy on amazon require my KYC/AML? Of course not. Those are products not services. Let's break down the statement in detail: > digital assets This is something I'd expect to be defined in the definitions section of the act. Even if it's not, the most reasonable interpretation is going to be something along the lines of any digital product whose ownership can be traded for material value gain, which would include cryptocurrencies, NFTs, and possibly MMO virtual currencies. There's definitely a lot of gray area in defining digital assets, but pretending that word documents and the like are digital assets is intentionally misreading the law. > effectuating transfers The plain definition of "effectuate" is "to bring about" or some other variation that specifically implies a causal link. To effectuate something requires that the agent itself is causing it to happen. Mere incidental participation wouldn't be sufficient. If I tell someone to take $1000 out of my ATM in cash and send it to somebody else in the mail, the person who is following my instructions is effectuating the transaction; the post office is not. > providing any service As mentioned above, we are specifically restricting this only to entities that are providing services, not products. So people whose roles are limited to providing products (such as software developers) are not affected by this rule. > responsible for and regularly providing And said services have to be provided on more than a one-off basis. So even the example I gave earlier of ordering someone to move money around wouldn't qualify; the person basically has to be willing to do this on an ongoing purpose, essentially as their business model, for this provision to kick in. In other words, the people who are affected by this are going to be those who are offering banking-like services for digital assets (e.g., cryptocurrencies, NFTs, WoW gold). Pedestrian things like routers and USBs are completely unaffected. The assertion of a sibling comment that software developers are potentially at risk is equally asinine. The people who are affected are the cryptocurrency exchanges, probably services like cryptocurrency tumblers, possibly miners or companies that operate MMOs.

dogman144 5y ago
It sounds like you have a much better handle on the law’s terminology in application than the industry groups and legal /regulatory teams do, which is good.
donmcronald 5y ago