Open source technology leaders are urging the new Congress to prioritize privacy in blockchain regulation
Written by Tonya Riley
A group of more than 28 technology organizations that develop open source and decentralized projects is urging Congress to “take a bold stance” to protect consumer privacy when regulating the blockchain space, the group wrote in an open letter sent Tuesday.
“This caliber of principled leadership for our digital future, and the future of digital innovation in the United States, is long overdue,” the group of signatories, led by the privacy organization Fight for the Future, wrote in the letter. “There is a strong need for deeper collaboration and dialogue between legislators and developers of privacy tools to bring forward well-informed, thoughtful and productive policies that advance human rights and the development of the Internet.”
The letter’s signatories include the Blockchain Association, the Zcash Foundation and the Free Software Foundation, among others.
The letter follows a turbulent year in Washington for blockchain technology, particularly the Treasury Department’s decision in August to sanction cryptocurrency mixer Tornado Cash. The action sparked an outcry from both the cryptocurrency industry as well as privacy advocates who argued that the sanctions countered legal precedent that considers code protected as free speech by the First Amendment.
“Increasingly, the incredible creative power of American software developers is being chilled by clumsy, misguided legislative and regulatory actions,” the authors of Tuesday’s letter wrote. “Should cybercriminals succeed in tempting the United States to abandon the human right to privacy and the US Constitution, everyone will lose.”
The letter also criticizes efforts by members of Congress to de-anonymize blockchain transactions, including legislation introduced late last year by Sens. Elizabeth Warren, D-Mass., and Roger Marshall, R-Kansas, which would require blockchain intermediaries to register as financial institutions and comply with the Bank Secrecy Act’s requirements for obtaining information about customers.
Instead, the group is urging Congress to pass legislation protecting privacy-preserving technologies.
“The world needs new tools that allow people to control their personal data, and the United States should continue its tradition of building them,” the signatories argue. “We urge you to create and pass long overdue laws focused on protecting people’s privacy and cracking down on government and commercial surveillance.”
These protections should be extended to encrypted messaging apps, which, according to the group, are also vulnerable to attack. Years of tension between U.S. law enforcement in the U.S. and abroad and tech companies over encryption remain a concern for privacy advocates. In December, the FBI called Apple’s move to fully encrypt its cloud services “deeply troubling.”
The letter notes that open-source privacy tools developed in the United States offer important protections both for journalists, protesters and marginalized domestic groups as well as citizens of countries that censor the Internet, including Russia and Iran. The groups also cited the importance of open source tools in consumer choice, noting that after Elon Musk took over Twitter, many users flocked to Mastodon, a decentralized social network.
Lawmakers made unprecedented progress on federal privacy legislation in 2022, but efforts stalled amid arguments over whether to give consumers the ability to bring private lawsuits under the law, as well as the extent to which state laws should be preempted.
