The bank’s confidential system threatens Trump’s submission to encryption

Donald Trump made a campaign to become the first.Chief of encryption“The early stages of its new administration were much better for the encryption industry from the previous administration. Between the BIDEN ERA Committee for Securities, Exchanges and Federal Banking Organizers, the participants in the industry were constantly exposed to the risks of high compliance and were mostly kept on the sidelines of the financial market.

On January 23, President Trump began fulfilling his promise. He fell Executive order “To enhance the leadership of the United States in digital assets and financial technology with the protection of economic freedom.” Among other items, the official policy of the administration is to protect and enhance the “ability of individual citizens and private sector entities” to “deal with other people without illegal control and maintain the self -needs of digital assets.”

Unfortunately, it appears that this part of the executive command has been paid alongside shiny things, such as the top of the encryption last Friday and the creation of a digital asset reserve box.

That’s all right now, and the administration deserves a tremendous balance to reflect the path around the anti -encryption approach to encryption in the previous administration. But the Reserve Fund does nothing to address the largest road barrier for Crypto: the financial monitoring system established by the United States for the Financial Industry.

BSA system threatens P2p transactions

This system is exactly the reason that people can no longer “deal with other people” without supervision, so it is important that the executive in January recognize the issue. But it is important for the administration to work with Congress to fix it, and so far there are very few signs of any such effort.

For those who are not familiar, the current financial monitoring system has been built on the 1970 bank’s secret law. The system is old, weak designer, expensive, and depends on fragile legal reasons. It is also clear that it is ineffective.

In 2023, for example, Resulted In about 300,000 financial institutions submit nearly 30 million BSA reports. Of all these reports, “approximately 1575 cases referred to in the prosecution included BSA files.” Separately, the Tax Authority opened “about 372 investigations as a result of reviewing the BSA files.”

One of the problems is that bankers, brokers and car dealers are not specialized in law. However, the government forces them, at the threat of criminal responsibility, to report the clients who may Be criminals. Therefore, it is not surprising that they tend to make mistakes alongside reporting.

BSA system ignores the rights

But it is worse than just asking a large number of useless reports. The current system assumes that everyone should be wiped because they are either guilty or may be guilty of crimes. It ignores the basic assumption of innocence that is supposed to build our judicial system, and that personal and financial privacy are essential components of life in a free society.

Clearly, it ignores the guaranteed protection of the Americans through the fourth amendment to the American constitution. The fourth amendment generally requires the government to obtain a judicial order when showing a possible reason to reach the person of the individual, home, papers and antiquities.

However, this protection no longer applies to the financial records of Americans when dealing with a third party, such as the bank or mediator. It also does not apply to any individuals who participate in “large” cash transactions with each other.

The BSA system was controversial from the beginning, and its arrival has grown over the years, expanded by Congress and federal agencies. But as the judge of Neil Goroush recently books In opposition 2018, “only because you are you Ownership The assignment of a third party to your data does not necessarily mean that you must lose the fourth amendment protection in it. “

Regardless of whether the Supreme Court is ready to review BSA, Congress can easily repair this problem.

Trump must work with Congress to repair BSA

Congress can adjust the BSA to keep the requirements to save the records while canceling the reporting requirements. They can then make sure that the application of the law can only reach these records with a valid inspection order. This reform would only emphasize the importance of the fourth amendment, which should not be controversial in the United States.

But this does not agree at all with the “reforms” that most officials pay.

For example, a former one organizer newly to attest To Congress, its members must “creatively rethink” “how to expand the current system to include encryption transactions. It is, like many in Congress, prefers to” expand the organizational ocean “and requires (at least some) encryption companies” monitoring transactions strongly “.

But this opinion is exactly backward. Crypto helped increase the focus mainly on the current financial monitoring system and why it should be canceled, thus restoring and re -emphasis on Americans.

Again, it is a great sign to see this confirmed language of rights in President Trump’s executive order, but there is a long way.

Congress must restore 4^Y amendment

Fortunately, some members of Congress were determined to repair the damage to the BSA system. For example, in 118^Y Congress, MP John Rose (R-Tn) foot (With three competitors) The bank’s privacy reform law, a bill that would reaffirm the protection of the fourth amendment of the Americans. (Rose is a member of the Financial Services Committee in the House of Representatives, and the draft law is supposed to be re -presented in 119^Y Congress).

On February 27, Senator Mike Li (R-UT) foot Similar legislation, a draft law entitled the Law of Swimidation. It is strange that there is similar legislation that did not come from the Senate Banking Committee, which is a group most male For Senator Elizabeth Warren, the ongoing attacks on the encryption industry. However, Senator deserves me credit for the rights of Americans.

It is clear that the current system has a balance of imbalance, a system that prefers law enforcement strongly over the rights of citizens to privacy. But the appropriate balance between these competing needs is in the fourth modification, so Congress must restore it. Do this may also be the most important change in Trump’s policy to strengthen US leadership in digital assets and financial technology.