The crypto world, as usual, is a bit of a mess. Roman Storm, the Tornado Cash developer, is still facing charges, and the whole thing feels…off. Like trying to solve a Rubik’s Cube in the dark. It’s not just about Storm, though. It’s about privacy itself, and whether having any of it is okay when dealing with digital money. The DC Privacy Summit recently tackled this, and the takeaway? Nobody really knows what’s going to happen.
- The debate around crypto privacy is complex, with concerns about illicit activities overshadowing legitimate privacy needs. Finding a balance is proving difficult, especially in the face of regulatory scrutiny.
- The industry is seeking clarity on regulations, as uncertainty around FinCEN guidance and SEC reach creates instability for businesses. Clear rules are needed to foster innovation and ensure compliance.
- Despite the challenges, there’s a fundamental desire for privacy, with some arguing it’s a human right. The debate continues on how to balance privacy with the need to combat illicit activities in the crypto space.
The problem is, “privacy” in crypto has gotten a bad rap. Thanks to things like the Lazarus Group – North Korea’s hacking crew – and the Treasury Department sniffing around crypto mixers as potential money laundering tools, the word conjures images of shadowy figures and illicit deals. It’s a fair point, of course. But Katherine Kirkpatrick Bos, chief legal officer at Starkware, pointed out that arguing for privacy because you want to buy a toothbrush without being tracked feels…weak when weighed against actual criminal activity. It’s a tough sell, even for privacy advocates.
But here’s where it gets really interesting. Miller Whitehouse-Levine, from the DeFi Education Fund, thinks this whole debate is happening in the wrong place. Courts? Really? He’d rather see Congress or a regulatory agency hash things out. It’s a bad way to make policy, regardless of which side you’re on. Allison Behuniak, from the House Financial Services Committee, agrees it’s slow going. She figures it’ll take “dozens of round tables” before lawmakers even *consider* a formal hearing. Progress, apparently, is measured in small increments.
Certainty is the Goal
The industry, understandably, wants some clarity. Michele Korver, from a16z Crypto, put it bluntly: businesses need to know what the rules are. Is doing X going to get you a fine? Or jail time? There’s a big difference. The current situation, where prosecutors are questioning how FinCEN guidance applies to money transmitters, isn’t helping. It’s like building a house on sand. And it ties into the broader market structure debate happening in Congress. If the SEC keeps expanding its reach, that comes with Bank Secrecy Act obligations, too. It’s a tangled web.
Legislation, even imperfect legislation, could be a step forward, according to Kirkpatrick Bos. It won’t solve everything, but it’s better than nothing. And, fundamentally, people *want* privacy. We close our blinds, we don’t broadcast our diaries, it’s just human nature. Whitehouse-Levine put it simply: it’s a fundamental human right. Which, you know, is a pretty big claim. But it’s a claim worth considering.
Speaking of big claims, Gary Gensler’s reign at the SEC is apparently coming to an end. CoinDesk has a pretty thorough rundown of his impact on crypto, and where things go from here. Worth a read, if you’re keeping score. And if you’re wondering who isn’t afraid of Gensler, Don Wilson, of DRW, might be your guy. He’s faced Gensler before, and won. A little historical precedent, perhaps?
On a brighter note, Binance’s Tigran Gambaryan is finally home, after Nigerian prosecutors dropped the money laundering charges against him. The U.S. is even establishing a “bilateral liaison group” with Nigeria to focus on crypto crimes. Progress, of a sort. Though, Citibank apparently debanked Ripple’s Brad Garlinghouse *because* he’s in crypto. Apparently, that’s a risk these days. And Tether’s CEO, Paolo Ardoino, expects the U.S. to eventually catch up on crypto regulation. He’s also dealing with rumors of a Treasury Department investigation, which he denies.
What’s Coming Up
Wednesday is a big day for former FTX Director of Engineering Nishad Singh. He’s being sentenced for his role in the FTX collapse. His lawyers are asking for no prison time, arguing he’s a “selfless individual.” The Department of Justice isn’t recommending a specific sentence, but did acknowledge his “substantial assistance” in the investigation. It’s a complicated situation, to say the least.
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Elsewhere, a telecom industry group is suing the FTC over its unsubscribe rule. Apparently, making it easy to cancel a service is now a legal battle. And a California Republican, funded by crypto PAC Fairshake, is attacking her Democratic opponent with some…interesting claims about cryptocurrency and China. Politico is also reporting that Cantor Fitzgerald’s CEO is running Trump’s transition team, and is allegedly discussing business – including Tether – during transition meetings. Wired profiled ZachXBT, the internet sleuth who tracks crypto thefts. And TechCrunch reported that someone offered Web3IsGoingGreat’s Molly White a bribe to take down a post. She declined, naturally. Finally, The Verge has an interview with Intuit’s CEO, who apparently asked them to delete part of the recording. It’s a wild world out there.
🚨 BREAKING: Binance Director of Financial Crime Compliance, Tigran Gambaryan, flew home late last week after Nigerian prosecutors dropped the remaining charges against him. The U.S. later announced a “bilateral liaison group” with the Nigerian government focused on crypto crimes. https://t.co/qXq9q9q9q9
If you’ve got thoughts, or just want to vent about the state of crypto, feel free to email me at nik@coindesk.com or find me on Twitter @nikhileshde.
