Everything You Need to Know About the Looming Battle Over Privacy in Crypto - Ep.199
Jake Chervinsky, general counsel at Compound Labs, and Kristin Smith, executive director of The Blockchain Association, talk about the storm brewing in the cryptosphere involving self-custody and privacy. In this episode, they cover:
- the differences between hosted and self-hosted wallets and how transactions between them differ
- why the ability to transact from self-hosted wallets is so important
- compliance and regulation in the traditional financial world and how it could affect self-custody
- the “Swiss rule” and what it could mean for the rest of the world
- the proposal by FinCEN to lower the threshold for collecting data on transactions from $3,000 to $250
- how regulators might achieve their goals without “dragnet” surveillance
- how the amount of crime and money laundering in the traditional financial system compares to that in the crypto world
- why OTC brokers are considered the most significant money laundering risk in crypto, and how that risk might be mitigated
- how different political environments can influence the value of peer to peer transactions
- whether Americans should be willing to give up some of their financial privacy in favor of security
- what the recent statement by the DOJ's cryptocurrency enforcement framework labeling anonymous transactions as "high-risk activity indicative of possible criminal conduct" could mean for privacy coins like Monero and Zcash
- Gary Gensler's appointment as head of Biden's financial policy transition team and whether to view it as a positive or negative for crypto
- whether they think the incoming Congress will be in favor of more surveillance or more privacy
- whether there might eventually be regulations for developers who write code for self-hosted wallets
- how potential rules regarding self-custody could affect non-monetary items like NFTs
- and the next big developments they are watching out for regarding this issue
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Episode links:
Jake Chervinsky: https://twitter.com/jchervinsky
Compound Labs: https://compound.finance
Kristin Smith: https://twitter.com/kmsmithdc
The Blockchain Association: https://theblockchainassociation.org/
https://twitter.com/BlockchainAssn
Coin Center commentary on lowering FinCEN threshold: https://www.coincenter.org/app/uploads/2020/10/Coin-Center-Comment-FinCEN-FRB-250-threshold.pdf
Unchained episode about the FATF travel rule: https://unchainedpodcast.com/why-the-travel-rule-is-one-of-the-most-significant-regulations-in-crypto/
The choice of Gary Gensler to lead the financial policy transition team:
https://www.wsj.com/livecoverage/trump-biden-election-day-2020/card/peMRHGPJasECSPLezSFx
https://www.coindesk.com/biden-confirms-gary-gensler-will-lead-financial-policy-transition-team
Shapeshift delists Zcash: https://www.coindesk.com/shapeshift-delists-privacy-coin-zcash-over-regulatory-concerns
Jessie Liu interview on Unchained: https://unchainedpodcast.com/what-you-need-to-know-about-the-dojs-cryptocurrency-enforcement-framework/
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