from Hacker News

Defending Privacy in Crypto

by barmstrong on 9/9/22, 5:13 AM with 79 comments

  • by Loic on 9/9/22, 6:44 AM

    It is interesting that I have strictly no empathy for the people defending "privacy" in crypto. I have it fully for the ability to pay in cash for our every day stuff.

    Privacy in crypto is basically reallowing tax havens in the "digital" world where we spent years to try to curtain them in the "real" world.

    A good friend of us happens to be working at a high level at the EU commission. Discussing about Bitcoin/Crypto, his answer was simple: "We will ban all crypto as soon as we consider it to create problems with taxes".

    Coinbase would win the case, it would be one more step in the direction of a ban in the EU.

  • by rdl on 9/9/22, 6:41 AM

    It's great that they're supporting the lawsuit (and the plaintiffs seem very well selected).

    There's also a coincenter lawsuit on purely constitutional grounds (https://www.coincenter.org/analysis-what-is-and-what-is-not-...).

  • by sunshinekitty on 9/9/22, 6:38 AM

    Thanks for standing up for users rights to privacy Brian. What will be the largest hurdles here with challenging the US Treasury? Why stand on this issue, vs privacy based coins previously removed from cb? What options are there if this proves unsuccessful?

  • by smithcoin on 9/9/22, 7:54 AM

    I think we should sanction using cash, it can be used untraceably and anonymously. Tornado Cash did $7 Billion in transactions. According to the US Treasury $300 Billion was laundered in US dollars last year. I think we are going after the wrong target.

  • by can16358p on 9/9/22, 6:37 AM

    Good (and TBH unexpected) move by Coinbase. If we lose the foundations of privacy at this stage, the future of crypto would be severely affected.

    Crypto and digital assets should be free from regulation, even if it brings side effects (e.g. laundering). The moment we centralize crypto by state, we lose the war against corrupted states and centralization.

    While I don't support bad actors that use crypto in any way, I still believe having them is a side effect that we need to accept for a better world without government survelliance.

    The upside still outweighs the downsides.

  • by rax0m on 9/9/22, 7:19 AM

    Very unexpected that this comes from Coinbase.

    But kudos where kudos are due! I hope this goes the way

  • by nappy on 9/9/22, 6:55 AM

    Nowhere in this blog post: any discussion of money laundering, sending funds to terrorist groups, rogue states. Without mention of any of the legitimate reasons the US government is sanctioning Tornado Cash, this is merely propaganda from a financially interested party.

  • by mouzogu on 9/9/22, 7:18 AM

    I don't think you can defend this kind of privacy in a court. They are not impartial.

    This is not really about crypto, or tornado cash. I think it's more about ownership and surveillance. The only solution is to innovate in the area of evasion. Since there is no middle ground amenable to the ones who make the laws in their own interests.

    We can just look at wikileaks, panama papers and so on. Money laundering and embezzlement is much more pervasive and rapaciously damaging in the highest levels of "power". Wealth "inequality" is an oligopoly of concentrated power and wealth.

  • by FabHK on 9/9/22, 6:57 AM

    I strongly support the right to privacy in messaging, ie encrypted communication.

    However, I am much more hesitant with privacy in money transfers. It is not obvious to me at all that we should have unlimited unregulated money transfers. In fact, I fear that unreflected support for the latter might erode the (already tenuous) support for the former:

    Currently, we might still be in a position to regulate and disrupt cryptocurrencies (for example, Bitcoin needs on- and off-ramps tied to tradFi, and Bitcoin traffic is unencrypted and can be detected (and censored), AFAIK). If that whole ecosystem were to succeed in ensuring encryption and anonymity in money transfers, we might get to a point where there is overwhelming political pressure to prohibit any encrypted communication, even more so than already.

    TL;DR: Cryptocurrencies might jeopardise Signal et al. Yet another reason to oppose Crypto: to protect encryption.

  • by manholio on 9/9/22, 7:34 AM

    What I would like to see is reversible and auditable privacy in crypto: to participate I need to disclose my real identity to a broker I trust that follows all KYC compliance rules in the jurisdiction it operates, and my financial identity and transactions are private until law enforcement performs an unblinding transaction that is auditable on the blockchain, (in the vein of Chaum blind signatures), yielding my broker identity and unique customer ID, which the broker can associate with its records.

    This way, I would have guaranteed and auditable privacy that the government cannot surreptitiously break, but there is an route to find identifying information with a noisy and court approved process. This would involve both a technological side and an organizational one - brokers would have to setup some type of clearing house that processes legal documents and requests for unblinding, approve new brokers and terminate those that do not follow relevant KYC practices, etc. A middle option between banks (no privacy, 100% agents of the government) and crypto (anonymous brokers, untraceable in competent hands, excellent for money laundry).

    We cannot continue to pretend that the current crypto crop "is just like cash". I most certainly cannot teleport 1 billion dollars in cash across borders, completely untraceable. If you cannot see a problem with this feature of crypto and the bad types of people it would attract and enable, then you might be suffering from a case of sociopathy.

  • by gerikson on 9/9/22, 7:09 AM

    This is going to be very interesting to watch. I hope to be able to read the lawsuit when it is filed.

  • by bprasanna on 9/9/22, 6:38 AM

    First coinbase should provide basic features to users before stepping up the Privacy. There is no way for a user to delete coinbase account. Looking around the web I realised its a dark pattern in their design.