Thursday, October 21, 2021

Financial Privacy Is for Criminals! What Are You Trying to Hide?

Financial Privacy Is for Criminals! What Are You Trying to Hide?

Do Bitcoin and anonymous cryptocurrencies enable crime? It feels like we’ve been serving up counter-arguments to this since the beginning — but then along comes another media claim. The argument is always the same: to fight crime, you have to give up more of your privacy.

Also read: Chinese ICOs Going P2P as Crypto Investors Find New Ways to Trade

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Criminals Using Bitcoin, Monero… Even Ethereum?

Left-wing news site Salon today republished a story that initially appeared on The Conversation on 25th September. Titled “By concealing identities, cryptocurrencies fuel cybercrime”, its headline sums up the main argument.

Monero logoBitcoin itself is private but tracking methods are improving, it said. Criminals have begun turning to technologies like Monero and possibly Zcash and MimbleWimble to cover their tracks.

Taking it further, the article suggests even smart contracts on platforms like Ethereum could not only pay criminals, but automate entire crime enterprises.

It was written by members of the Initiative for Cryptocurrencies and Contracts (IC3), consisting of faculty members from several U.S. universities and colleges including Cornell University, Cornell Tech, UC Berkeley, UIUC and the Technion.

Not Anti-Crypto But Not Helping Either

Notably, the National Science Foundation-funded group is not anti-cryptocurrency. It describes its objective as to promote blockchain technologies by “collaborating with domain experts in finance and banking, entrepreneurs, regulators, and open source software communities”.

The Conversation‘s article, however, is still irresponsible — and especially for an advocacy group. The headline is negative and many who share it won’t read past that, spreading further the meme that cryptocurrency = crime.

Additionally, it doesn’t provide any argument noting cryptocurrency’s benefits. Its only conclusion is that “cryptocurrencies are innately anti-authority technologies”, ergo authorities must be further empowered to deal with them. That’s pandering to the authoritarian, anti-Bitcoin crowd — which will only lead to more restrictions.

Bitcoin and Cryptocurrencies Do Help Criminals

Cryptocurrency fans need to face some facts — the reason the crime issue keeps returning like zombies in Dawn of the Dead is because there’s an element of truth to it.

fingerprint digital crime privacyYou couldn’t collect funds from a mass ransomware attack with cash, credit cards or PayPal. It would be extremely difficult for dark web marketplaces like Silk Road, Alphabay or Dream to operate.

However the reason for all that is, these days, there’s no such thing as financial privacy. Every non-cash transaction is recorded and tied to a real-world identity. And governments are doing their best to eliminate cash as well. Once that’s gone, so is privacy.

You Either Have Privacy or You Don’t

Does IC3 feel people do not have a right to financial privacy? Not really — its article describes the necessity of balance, or “finding a socially responsible blend of privacy and accountability”.

But let’s face it, the only way you can “balance” privacy with authority is to remove privacy. When all transactions are monitored and identifiable, there’s no privacy at all. The U.S. has its Fourth Amendment that prohibits “unreasonable searches and seizures”, but other countries don’t and even in the U.S. it’s arguably violated on a more frequent basis every year.

Think how many crimes law enforcement could theoretically stop, if they had open access to everyone’s private house or business.

Why don’t you want a camera in your kitchen or bathroom — are you saying something you shouldn’t? Why can’t the police simply enter any house or business they like, without needing a warrant or reason, at any time? Are you hiding something?

Technically, your physical privacy is also “enabling crime” if it hinders a police investigation. Where exactly is the “right blend”, or “balance”?

Privacy Sounds Better Than Anonymity

Rather than cryptocurrency advocates protesting their technology doesn’t enable some criminal activity, we need to focus on the value of privacy — and what happens if we lose it. Too many people these days seem to accept any intrusion, especially into their digital existence and finances.

We need to talk more about “privacy” and less about “anonymity”. The latter is too easy to demonize.

In a way, Bitcoin has forced many to think about what money is, who controls it and what individuals should be able to do with it. Rather than creating dark, scary anonymity — as the media wants us to believe — it simply gave us back some of the privacy we’d lost.

Maybe it makes life easier for some criminals. But law enforcement is well-resourced and will have to be more creative in how it catches them — rather than demanding our every action be monitored, Nineteen Eighty-Four style.

Is there such thing as “the right blend of privacy and accountability”? Let’s hear your thoughts.

Images via Pixabay

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