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To survive, Bitcoin businesses will have to do more than "de-anonymize" their operations. They will also have to cope with the loss of the digital currencys most fundamental characteristic: irrevocability.
June 5 -
"Digital currencies are exciting because of the innovation," but "being a financial institution comes with certain responsibilities," says Fincen Director Jennifer Shasky Calvery in a Q&A.
May 30
Why do we never hear about whistleblowers coming from the Financial Crimes Enforcement Network of the U.S. Treasury? Where are they?
Regarding surveillance, the world may never have a Fincen whistleblower in the same way that we have an
Blatant and stated upfront, the unimpeded surveillance of Americans financial activity is Fincen's core mission. So, nothing much to blow the whistle on there.
Since the establishment of
In typical crime-speak fashion, it is therefore possible to have telephone crime and email crime, because persons committing illegal acts can use telephone and email channels to execute their deeds. Perhaps this is why the U.S. administration and the NSA don't see much wrong with PRISM. In their minds, violating the privacy rights of the 99.99% is justified if it ultimately results in the identification of the evil 0.01%.
In true
The larger debate around privacy is not just a matter of perception. Nor is it about
Since the available
It shouldn't have to be this way. We shouldn't always have to deploy the strongest available encryption techniques against the surveilling class. The surveilling class should simply
As shameful as the existence of
As banks and credit card companies become more complicit in the surveillance, digital currencies with proper
At a
Some type of back door, or exception, for law enforcement must certainly be possible to protect the children, you know. Although virtual currency exchange endpoints can be regulated, two representatives of the Bitcoin Foundation clearly stated the obvious limitations in altering the Bitcoin transaction protocol itself. Also, for the life of me, I cannot imagine how the Tor Project could compromise itself in an acceptable way. It would be like asking a toaster not to toast.
In her opening
However, upon leaving the director's U.S.-centric bias, two other lenses emerge U.S. interests versus rest-of-the-world interests. And, this is where we find our elusive whistleblower.
The Fincen whistleblower is other sovereign nations and they are starting to speak.
In April, the Dutch Minister of Finance and president of the Board of Governors of the European Stability Mechanism, Jeroen Dijsselbloem,
When asked if "the activities as performed by Bitcoin fall under the Financial Supervision Act or is this a private activity," Minister Dijsselbloem responded, "Anyone is free to develop and/or use alternative (digital) products, as long as it does not conflict with the Dutch law, such as the law on gambling."
He continued: "The current understanding is that Bitcoin is not electronic money as meant in the Financial Supervision Act, partly because Bitcoins are not issued in exchange for received money and they do not represent a claim on the issuer. Because of this, Bitcoin does not meet at least two of the four requirements set out in the law. Also, Bitcoin is not in any other way a financial product as meant by the law. (Mediation in) the purchase or sale of Bitcoins is not a financial service either, so the Financial Supervision Act does not apply."
Many educated and developed countries don't immediately see every product as something to track and don't necessarily view financial privacy as a negative. Indeed, prior to immense and unparalleled pressure from the U.S., bank secrecy and client confidentiality had been a proud heritage in countries such as Switzerland, Austria, and Liechtenstein.
But will the world listen to the up and coming Fincen whistleblowers? They should. Either willingly or begrudgingly, the world has embarked on a path of greater and greater transparency in a bargained exchange for the warm embrace of security. But, the ends do not justify the means in that grand tradeoff. A world where privacy isn't sacrificed and all human transactions aren't tracked is not only possible, but imperative. The alternative will be far worse than you can imagine.
Jon Matonis is an e-money researcher and crypto economist focused on expanding the circulation of nonpolitical digital currencies. His career has included senior posts at Sumitomo Bank, Visa, VeriSign and Hushmail. Currently, he serves on the board of the Bitcoin Foundation. Follow him on