Earlier this month, the United States Department of Justice (DOJ) published a regulatory framework for cryptocurrencies and digital assets that violates users' digital privacy rights.
The United States Department of Justice published a document titled «Report of the Attorney General's Cyber Digital Task Force: Cryptocurrency Enforcement Framework«, where he sets out his position regarding the use and application of the cryptocurrencies, and digital assets. The DOJ says that these types of assets have different uses, including illicit activities such as terrorism, the purchase of illegal items, blackmail and extortion, cryptojacking, and money laundering. Although the illegal uses section of the document is shorter compared to the potential and beneficial uses of digital assets, the DOJ says it has been studying for several years how best to address the problems associated with the illegal use of cryptocurrencies.
The agency has therefore released a new regulatory framework for cryptocurrencies, including privacy regulations, in an attempt to minimize illegal acts with digital assets. The agency claims that it has the authority to apply the full weight of laws and regulations on companies that carry out illegal operations with cryptocurrencies and digital assets, even if they operate from foreign territories but offer their services to US citizens.
The new enforcement framework is being analyzed by several experts in the field, who are beginning to highlight how it violates users' digital privacy rights, considering that the DOJ's intentions violate several of the basic principles of digital privacy, anonymity and civil activities.
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A threat to privacy
Marta Belcher, a special adviser to the digital rights advocacy group, says the new enforcement framework is a complete threat to users' digital privacy rights.
“It is a complete disaster for privacy, anonymity and civil liberties in the cryptocurrency space.”
The specialist affirms that there are many concerns regarding the application of the new regulatory framework for cryptocurrencies, with special emphasis on P2P exchanges, mixer services and privacy coins. In its statement, the DOJ pointed out that Monero (XMR), Zcash (ZEC) y Dash (DASH) such as private cryptocurrencies whose use may indicate criminal conduct.
“The Department considers the use of AEC (Anonymity Enhanced Cryptocurrencies) to be a high-risk activity that is indicative of potential criminal conduct. AECs are often exchanged for other virtual assets such as Bitcoin. This may indicate a cross-virtual asset layering technique for users attempting to conceal criminal behavior.”
In response to the DOJ's statements, Belcher argues that there may be serious implications for both companies that provide cryptocurrency-related services and users who send and receive money between each other through these digital assets. The DOJ's enforcement framework even points to cryptocurrency mixer services, product import companies, and companies that transmit and send remittances to the country as entities subject to international regulations, such as the Bank Secrecy Act (BSA).
The “risk” of privacy on the networks
According to the US Department of Justice, private transactions, which are carried out with privacy cryptocurrencies, allow cybercriminals and other bad actors to commit their criminal acts without any consequences, complicating the work of the authorities to track illegal money and, in many cases, making it impossible to detain and arrest them. These are the arguments that the entity presents to impose its laws on the use of these assets. Likewise, the DOJ, together with other government entities in other countries, including India and Japan, issued a release to request “backdoor” access to various instant messaging services, which operate with end-to-end encryption, and other services.
The petition is based on the fact that encryption technology represents a challenge to the public security of governments and nations, which is why it is essential that government organizations have access to the different contents that are published and shared through the Internet, networks and encrypted communication services.
Public security
According to the statement, the DOJ and law enforcement have a responsibility to protect citizens by investigating and monitoring the content that is shared, prosecuting those who commit crimes, and ensuring that the most vulnerable are protected. In addition, the entity states that technology companies also have responsibilities and must establish terms of service so that users grant them authority to act to the extent of protecting the public. With this, the DOJ alleges that crypto services and digital asset companies must include a clause that gives users authorization to access the information and data they share, in order to prevent crimes from being committed.
“End-to-end encryption that precludes lawful access to the content of communications under any circumstances directly undermines these responsibilities, creating serious risks to public safety.”
As seen, the framework reflects governments’ long-standing intentions to enforce the law on any technology that enables private transactions, and to prevent them from monitoring and controlling how citizens use and spend their money. Belcher said these are the same arguments that have always been used against cryptography and encryption, and that they “come from exactly the same place.”
Attempts to control and monitor citizens
This media reported in June that the United States Senate introduced a proposal a law that seeks to create a backdoor within encryption systems, with the purpose of strictly and constantly monitoring and controlling encrypted digital activities that take place in different spaces, including communications and cryptocurrency operations.
Thus, given the US government's efforts to control citizens and force companies to collaborate with its ends, Belcher believes that the DOJ's actions are a complete affront to privacy rights and civil liberties. The expert in digital rights advice considers it an inviolable right for people to use encrypted exchanges to carry out their operations and commercial transfers, in the same way as they do with cash, without the need to keep a record and without being questioned in such a way by governments.
“People who use these exchanges have a responsibility to anonymously exchange cryptocurrency with others. Saying I can’t send you cryptocurrency using a script, you and I can’t transact directly with each other in a peer-to-peer manner without the data being collected somewhere by a third party is a complete affront to privacy and civil liberty.”
Fiat money, the real problem
In reference to this topic, a user on Twitter published, in response to statements made by the Minister of Finance in France, Bruno Le Maire, that cash is widely used for the financing of terrorism and other illegal activities without any control by governments or authorities, who seek to impose their laws on the use of cryptocurrencies.
Belcher agrees, saying that technology, cryptography, or cryptocurrencies cannot be blamed for crimes committed by individuals, though she stressed that wrongdoing should be condemned and prosecuted for the benefit of society as a whole. She noted that the Justice Department has brought dozens of cases of crimes that were committed involving cryptocurrencies in some way, including several recent high-profile cases, but that these digital assets should not be blamed for them.
“Blaming cryptocurrencies for their use in crimes is nonsense.”
Belcher concluded that cash has always been used to facilitate and finance illegal activities, and that fiat money is not to be blamed or condemned for it. Finally, Belcher concluded by arguing that “we do not blame Ford when one of its cars is used as a getaway vehicle in a bank robbery.”
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