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“Your Expectations of Privacy Are Too High” (But They Shouldn’t Be)

Every bitcoiner has a responsibility to themselves and their community to establish the following precept: We are not guilty simply because we own or use bitcoin.

The post “Your Expectations of Privacy Are Too High” (But They Shouldn’t Be) appeared first on Bitcoin Magazine.

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Bitcoin mixing, the practice of scrambling one’s bitcoin with others in order to obscure the connection between an individual’s identity and coin address information, has seen a number of innovations over the last decade. Some of the early mixing efforts took the simple form of two coin holders privately agreeing to swap coins in like amounts and led to the formation of transaction aggregation services, crypto tumblers, Lightning, and the practice of moving coin balances through interim coins like Dash or Monero, or others. There are also logless VPNs, Tor, and using HD (“Deterministic”) wallets. Each of these practices comes with a set of costs and benefits, and none are perfect; thus, many cryptocurrency users and devotees employ several or all of these means to maintain their anonymity. 

And so it is that the recent arrest and indictment of DropBit CEO Larry Harmon several weeks back sent a chill down the spines of crypto users and privacy entrepreneurs alike. 

Between 2014 and 2017, Harmon operated a custodial tumbler service, Helix, a sidecar to a darknet search engine called Grams and eventually to the darknet marketplace AlphaBay (among others). This service allowed users to search, buy and sell on the unindexed deep web with new addresses generated for each transaction. 

The indictment against Harmon claims, among other things, that over 350,000 BTC was received into custody, tumbled and then transmitted by Helix without a license from the Superintendent of the Office of Banking and Financial Institutions of the District of Columbia (some of his customers having been located there), without being registered with FinCEN (the Financial Crimes Enforcement Network), and in violation of a number of federal laws. 

Tired Tropes

It’s worth remembering that right about the time that Harmon was arrested — in fact, the day before — U.S. Treasury Secretary Steve Mnuchin spoke before the Senate Finance Committee. Applying such classic and time-worn euphemisms to cryptocurrencies as being a “crucial area” (translated: “a crackdown is about to begin”) and calling for increased “transparency” (translated: “your expectations of privacy are way too high”), his speech was capped off by words that many of us have long expected: that bitcoin, and cryptocurrencies more generally, pose a national security threat to the United States. 

The problem, of course, is that the putative threats mostly represent entrenched interests and institutions situated high in the edifice of state power. While one can understand that large firms and legacy institutions (a particular one of which is characterized by an intractable quasi-government ownership structure) would rent-seek to prevent their displacement by competing ideas, technologies and new institutions, that understanding takes a form similar to that which accompanies seeing nations go to war or watching a bully victimize a smaller, weaker person: It occurs, it may even be inevitable, but no one should stand aside silently.

Issues of KYC and AML

The implications of this newly reinvigorated push has implications for all bitcoin and crypto owners and users — the overwhelming majority of which have never transacted upon (let alone visited) the dark web. At present, individuals are not responsible for knowing the precise history of their coins. But if laws relating to the responsibility of a purchaser to ascertain whether their property has been stolen or not extends to crypto, or (more likely) if exchanges decide to include blockchain analysis in the measures they undertake to “reasonab[ly]” ensure that they are vigilant against money laundering, the fungibility of bitcoin will be damaged. There is no established standard against accepting coins with mixing in their histories; yet if it becomes the modus operandi, many coins will be rendered unusable. 

If one purchases, sells or even receives a coin which, unbeknownst to them, contains a “laundered” history or objectionable material (your imagination suffices), is legal culpability triggered? 

How much personal responsibility does one bear for knowing the recent (or, indeed, all) transactions a coin or other crypto asset in their possession has been party to? Can coins which have been mixed in the past or been part of illegal transactions be seized in the same way that funds and other sorts of property can in civil forfeiture proceedings? 

The particulars of the Harmon case also involve other issues which perennially plague the crypto community, and specifically that exceedingly important part of our community which seeks to broaden the commercial usage of crypto: KYC/AML. I personally believe that one can do far more to further the cause of liberty (of which crypto is a key component) from outside of a jail cell than inside one. Thus, however begrudgingly, not running afoul of existing laws is critical; indeed, anyone who truly understands the power of the state would and should counsel adherence to the rule of law. But parallels between the massive expansion of two nearly contemporaneous government initiatives, the “Bank Secrecy Act” (October 26, 1970) and the so-called “War on Drugs” (June 18, 1971) over half a century cannot be ignored. 

Personal Responsibility and Bitcoin Privacy — For the Greater Good

But every individual who has ever owned or used bitcoin has a responsibility to themselves, to fellow bitcoin owners and proponents, and to the many who would use bitcoin to establish the following precept: We are not guilty and do not concede any guilt whatsoever, by virtue of the simple fact that we own or transact in cryptocurrencies. We will not be accused, nor will we recognize suspicious overreach in the face of seeking to maintain privacy in our transaction histories. 

And we make no apology, whatever arguments are made or caveats flung, for seeking the rights to privacy which are enshrined not just in the Constitution but more importantly in the natural order. If there is indeed a “national security interest” at stake, it begins not with monetary innovation but vastly more fundamentally: with the predictable mobilization against technological, financial and social innovation by states and their factotums.

This is an op ed contribution by Peter C. Earle. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

The post “Your Expectations of Privacy Are Too High” (But They Shouldn’t Be) appeared first on Bitcoin Magazine.

Source: https://bitcoinmagazine.com/articles/your-expectations-of-privacy-are-too-high-but-they-shouldnt-be?utm_source=rss&utm_medium=rss&utm_campaign=your-expectations-of-privacy-are-too-high-but-they-shouldnt-be

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Indian government cautious about crypto-adoption, CBDC is a possibility

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Indian traders and exchanges might be bullish about the crypto market, but the Indian  government doesn’t seem keen on rushing into the scene. At least, not until studying its homegrown fintech industry and the anti-Bitcoin protests in El Salvador.

Tracking global news

Indian finance minister Nirmala Sitharaman in a recent interview with Hindustan Times explained why the country seemed to be falling behind when it came to crypto adoption.

Though she admitted, El Salvador wasn’t “the best example,” Sitharaman said,

“You’d think common people don’t care about digital currency; but the public took to the streets against the move. It’s not a question of literacy or understanding – it’s also a question of to what extent this is a transparent currency; is it going to be a currency available for everyone?”

Sitharaman referred to CBDCs as a “legitimate” cryptocurrency and admitted there could be a “possibility,” in hat regard. She noted that India held the “strength of the technology” and acknowledged the need to formulate a Cabinet note. However, Sitharaman wondered if India was ready to follow El Salvador’s way.

Facts on the ground

Though accessibility is a pressing concern, more Indians have discovered crypto than perhaps expected.

Nischal Shetty, CEO of the Indian crypto exchange WazirX – a subsidiary of Binance Holdings – has stated that WazirX sign-ups from India’s tier-two and tier-three cities overtook those from tier-one cities this year. Even so, sign-ups from tier-one cities themselves saw a 2,375% rise. Furthermore, WazirX added one million users in April 2021 alone.

Adding to this, the cost of electricity and Internet data in India are relatively cheaper, which could boost both crypto trading and mining in the future. However, at the last count, there was only one Bitcoin ATM in the whole country.

As per data by Useful Tulips, which combined data from Paxful and LocalBitcoins, India saw transfers worth around $4,502,369 in the last two weeks.

Could anti-Bitcoin protests happen in India?

There is evidence to support both sides. India has a strong history of mass protests, with the farmers’ protests against the government’s agricultural laws being one such example. The 2016 demonetization of part of the country’s paper currency still haunts many, and Internet penetration is yet to cross 50%.

However, India also has the largest diaspora in the world, with approximately 18 million people living outside the country. Crypto innovation could lead to hundreds of millions of dollars being saved on remittance charges as money is sent across borders.

But for the time being, it seems India’s urban residents are more bullish about crypto than its government.

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Source: https://ambcrypto.com/indian-government-cautious-about-crypto-adoption-cbdc-is-a-possibility

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A Deep Dive Into The Bitcoin Wallets Of U.S Congress Members, And Why Bitcoiners Are Strongly Against Them

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A Deep Dive Into The Bitcoin Wallets Of U.S Congress Members, And Why Bitcoiners Are Strongly Against Them

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Key takeaways

  • U.S. Congress’ split disposition towards cryptocurrencies raises concerns among market participants.
  • Bitcoin proponent, James Loop goes digging into the financial disclosures of Congress members.
  • His findings revealed only three Congress members have ever disclosed that they hold Bitcoin.

The United States is a key base for innovation and adoption in the cryptocurrency industry. According to data from Crunchbase, there are at least 1,135 organizations founded in the U.S. that provide various cryptocurrency-related services.

Despite the broad adoption of the asset class by the country’s citizens, the government is still divided on opinions about the growing cryptocurrency industry. This can be seen in the U.S. Congress where members of Congress are split between those who support and those who do not support Bitcoin, the most prominent cryptocurrency.

This polarised disposition of Congress has been a pain point for Bitcoiners. Bitcoin market participants have pointed out several issues that emanate from the fact that there are still members of Congress who have not shown themselves to fully understand Bitcoin.

The sentiment is that Congress members who do not fully understand the asset, having not used it, should not be responsible for making laws about it. Additionally, market participants also think it will be a conflict of interest if members of Congress who oppose Bitcoin are found to be holding Bitcoin or if those who support it do not own any. 

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Jameson Lopp, the co-founder, and chief technology officer of Casa – a leading provider of Bitcoin self custody solutions, has gone digging into the United States Senate Financial Disclosures portal. The investigation was carried out to identify Congress members who have declared holdings of cryptocurrencies, and Bitcoin in particular, in their portfolios. 

His findings paint a dismal picture as the majority of the members of Congress who have been vocal in supporting Bitcoin have not held the asset at all according to their financial disclosures for the year ending 2020.

According to his findings, only 3 Congress members have disclosed that they own Bitcoin. The now-retired Representative Bob Goodlatte of Virginia was the first Congressman to disclose the ownership of Bitcoin, doing so in 2017 even before laws were passed to make disclosure mandatory. According to his disclosure, he owned between $1,000 and $15,000 of Bitcoin at the time.

Among currently seated Congress members, only Senators Cynthia Lummis and Pat Toomey have reported Bitcoin holdings in their portfolios in 2020. Senator  Lummis reported owning $100,000 – $250,000 of bitcoin in 2020 making up between 0.6% and 2.75% of her net worth. Similarly, Senator Pat Toomey reported purchasing $1,001 – $15,000 of GBTC in June 2021. The GBTC investment is between 0.01% and 0.7% of his net worth.

The sleuth however concedes that he did not have the time and resources to go through the financial disclosures of all 535 congressional members. Nonetheless, it is telling that of the ones he checked, even members of caucuses in Congress that are affiliated to cryptocurrency and members that have drafted bills that will provide clarity for the industry do not hold Bitcoin or other cryptocurrencies as their financial disclosures show.

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Source: https://zycrypto.com/a-deep-dive-into-the-bitcoin-wallets-of-u-s-congress-members-and-why-bitcoiners-are-strongly-against-them/

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China Again? — Why The Crypto Market Lost Over $300 Billion In Hours And What To Expect

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China Reemphasizes It's Not Yet Done With Clamping Down On Bitcoin

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Key takeaways:

  • Crypto-market records over s$1 billion worth of Crypto liquidations in hours. 
  • Liquidated long positions significantly surpass shorts.
  • Fundamental factors pose serious threat to the market, but the road to recovery is near.

The crypto market has been hit with yet another massive liquidation. Within the last 24hrs, a whopping $1.03 billion worth of long and short positions have been liquidated, as reported by the aggregate derivative exchange platform ByBt.

When traders are long on a particular asset, they are simply gaining exposure to the cryptocurrency in question, in hopes that prices will surge significantly at a later time. It appears that a lot of investors were bullish on crypto for the most part, as long positions were significantly higher than shorts. Precisely $946.10 million worth of crypto was liquidated, while $6.56 million short positions were liquidated.

Liquidations usually take place in the crypto market when a trader’s leveraged position is forcefully sealed by an exchange when the trader’s initial margin is partially or totally lost. Futures and margin trading is usually where liquidation is common.

Many market pundits have warned against over-leverage, which they point to as the case of repeated liquidation. However, despite cryptocurrencies being high-risk due to the intense volatility, leveraging provides an opportunity for investors to generate significant profit. For this reason, liquidations are imminent.

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On a larger spectrum, the question at hand is how the market will be affected going forward. Although no one can accurately predict, recent events hint that the dip could go even deeper, no thanks to fundamental factors like the ongoing Evergrande crisis.

“The Hong Kong stock market plummeted, triggering a decline in global markets and cryptocurrencies. The main reason is Evergrande, China’s largest real estate company with nearly 2 trillion debts.” wrote Chinese journalist Colin Wu.

Thus far, leading assets like Bitcoin, Ether, Solana, Cardano, and many others have dropped in price value and are, at this time, still going downwards. Bitcoin has plummeted to $42,928. While losing more than 7% in value today. Ether, XRP, SOL, DOGE, and Cardano are likewise seeing an extensive decline.

In response to the dip, analysts have responded to their previous sentiments on Bitcoin especially, saying that the expected floor price for this month remains at $42,000 and that a bounce will follow a while later. Altcoin analysts are also keeping their fingers crossed to see how the next 24hrs play out before predicting the market’s trajectory.

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Source: https://zycrypto.com/china-again-why-the-crypto-market-lost-over-300-billion-in-hours-and-what-to-expect/

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