Crypto advocates file amicus brief to address users’ Fourth Amendment privacy rights

October 22, 2023 Coin Telegraph

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The amicus brief was filed to support an appeal against the Internal Revenue Service in relation to a 2017 court order where Coinbase was forced to hand over data from more than 14,300 of its users to the IRS.

Cryptocurrency advocacy group DeFi Education Fund (DEF) has urged a United States court to consider the unique aspects of blockchain technology when evaluating the privacy rights of cryptocurrency users under the Fourth Amendment.

DEF filed an amicus brief to the U.S. Court of Appeals (First Circuit) on Oct. 20, supporting James Harper’s appeal against the Internal Revenue Service as part of a fight to prevent the U.S. government from having unfettered access to a user's transaction history on cryptocurrency platforms.

Harper was one of 14,355 Coinbase users whose data was handed over by the cryptocurrency exchange to the IRS following a court order in 2017, which sparked a fight for stronger digital privacy rights.

DEF is proud to support the industry by filing amicus briefs in precedent-setting cases, such as Harper v. IRS, which involves a John Doe subpoena to Coinbase that resulted in over 14,000 users’ private financial information being sent to the IRS.

Our CLO @amandatums breaks down… https://t.co/JidwyPMzcj
— DeFi Education Fund (@fund_defi) October 20, 2023

DEF argued that the Fourth Amendment needs to be revised to rebalance law enforcement’s investigative powers and an individual’s right to financial privacy in the digital age.

“When old precedents meet new technology, courts must ‘assure preservation of that degree of privacy against government that existed when the Fourth Amendment was adopted.’”

The Fourth Amendment of the U.S. Constitution serves to protect people from unreasonable searches and seizures by the government.

DEF also pointed to the case of Carpenter v United States to argue that the Fourth Amendment limits the U.S. government’s capacity to obtain data from third-parties platforms like Coinbase.

The advocacy group further explained that because cryptocurrency transactions are traceable on public ledgers, it is possible to connect real-life identities to their pseudonymous addresses.

This impacted the livelihoods of all 14,355 users in the Coinbase case, DEF explained:

“The government’s request in this case therefore implicated every user’s every transaction, now and forever, including their ‘familial, political, professional, religious, and sexual associations.”

“It gave the government a “detailed, encyclopedic, and effortlessly compiled” synopsis of the lives of Harper and 14,354 others,” DEF added.

This degree of insight far exceeds what is attainable through traditional banking records, the lobby group argued.

4/ We argue that the Court must take into account core differences between crypto technology and TradFi because blockchain data provides the government with an intimate view into a person’s financial life in the past, present, and future. pic.twitter.com/KORSLRhqNY
— Amanda Tuminelli (@amandatums) October 20, 2023

The DeFi Education Fund's mission is to educate policymakers about the benefits of decentralized finance and to achieve regulatory clarity for the DeFi ecosystem.

The final decision of Harper v Werfel and Internal Revenue Services is expected to set a precedent for digital privacy rights and law enforcement measures in the U.S.

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Lobby group to dispel crypto mining misconceptions in DC, says founder

August 16, 2023 Coin Telegraph

Advocacy

The crypto mining industry is getting a dedicated lobby group aimed at opening up discussions with lawmakers in Washington D.C.

The United States crypto mining industry is getting a new lobbying group, with one of its biggest goals to dispel misconceptions about its sustainability from policymakers.

Launched on Aug. 15, the Digital Energy Council said its aim is to advance policies that encourage the growth of digital asset mining and energy development.

DEC founder and president Thomas Mapes told Cointelegraph it was “long overdue” for digital asset miners to have a unified voice in Washington D.C.

Its official first member association solely focused on the intersection of digital asset mining and energy ⚡️ policy at the federal level, look forward to working with digital asset and energy leaders check it out: https://t.co/kBFRkXHTNy https://t.co/kzNhtfxYZi
— Tom Mapes (@tommapes88) August 16, 2023

Mapes previously served as the director of energy at the Chamber of Digital Commerce. Prior to that, he was chief of staff at the U.S. Department of Energy’s Office of International Affairs.

Mapes said it was during his time at the Energy Department that he began to see crypto mining firms as an essential part of the energy ecosystem — providing energy to the grid during times of demand or purchasing excess energy that would otherwise go unused — among other benefits.

“I see them as energy companies in the future,” he said, adding:

“I see energy companies, utility companies, power providers — the big majors — all taking a look at this new technology and figuring out ways they can get involved in this.”

However, Mapes expressed that many lawmakers have yet to see the industry in the same light. “Within the past year or so, you have pieces of legislation dropping against the industry,” he said.

In March, the chair of the Senate Environment and Public Works Submittee announced the reintroduction of legislation accusing crypto miners of “sucking megawatt after megawatt from our public grids” and emitting huge amounts of greenhouse gasses, “just so they can make a buck for themselves.”

Mapes cited Biden's proposed 30% digital asset mining excise tax and the White House’s crypto mining environmental impact report as other examples.

Mapes confirmed the association has several founding members which include crypto mining and energy firms — some of which are publicly listed companies.

Excited to see the launch of the Digital Energy Council, the first association focused on the intersection of energy security and digital asset mining. Their mission to promote responsible energy practices, grid resilience, and economic growth through crypto mining is crucial for
— Daniel Speiss (@DanielSpeiss) August 15, 2023

The association’s membership and its lobbying efforts will be solely focused on the U.S. for now, he added.

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Crypto regulation decided by Congress, not the SEC: Blockchain Association

February 15, 2023 Coin Telegraph

Advocacy

The group's policy head doubted a divided Congress can create crypto legislation but said it doesn’t give regulators absolute authority in the interim.

Despite attempts to police cryptocurrency through enforcement actions, United States financial regulators “are bound by legal reality” and Congress will ultimately decide crypto regulations the policy expert for the crypto advocacy group Blockchain Association has suggested.

The association's chief policy officer, Jake Chervinsky, shared his views in an extensive Feb. 14 Twitter thread on the state of crypto policy.

He noted neither the Securities and Exchange Commission (SEC) nor the Commodity Futures Trading Commission (CFTC) “has the authority to comprehensively regulate crypto.”

14/ No matter how many enforcement actions the SEC and CFTC bring, they are bound by legal reality:

Neither has the authority to comprehensively regulate crypto, neither can obtain it through any amount of enforcement, and neither will ever have it without an act of Congress.
— Jake Chervinsky (@jchervinsky) February 14, 2023

Chervinsky believed a deal on crypto legislation seems “unlikely, given the ideological gap between House Republicans and Senate Democrats.” He accused the SEC and CFTC of overstepping their authority in an attempt to “get things done” without Congress.

Chervinsky called for the industry to remain calm following the recent flurry of activity from “crypto’s chief antagonist,” the SEC, and pointed to its crackdown on staking services as an example.

13/ The SEC's main tactic is regulation by enforcement, and it struck again last week by labeling Kraken’s staking service a security.

That's frustrating, but it doesn't change much for anyone else. Settlements aren't the law, and every set of facts is unique. Others will fight.
— Jake Chervinsky (@jchervinsky) February 14, 2023

The SEC’s Feb. 9 settlement with crypto exchange Kraken, that banned the exchange from ever offering staking services to U.S. customers, was publicly rebuked by SEC Commissioner Hester Peirce.

In a Feb. 9 dissenting statement, Peirce argued that regulation by enforcement “is not an efficient or fair way of regulating” an emerging industry.

Chervinsky suggested litigation is one way the crypto industry can push for good policy, noting the judiciary plays an important role in dictating policy that has been “ignored.”

20/ FIFTH, we can litigate.

Policy is made in all three branches of government, and we’ve ignored the judiciary for too long.

At the core of crypto is a fight for civil liberty, a fight that calls for impact litigation.

Our best allies may be in the courts. Let's go find them.
— Jake Chervinsky (@jchervinsky) February 14, 2023

Crypto exchange Coinbase also faces an SEC probe similar to what resulted in Kraken’s settlement.

Coinbase CEO and co-founder, Brian Armstrong, has taken a more resolute stance, claiming that getting rid of crypto staking would be terrible for the U.S.

Armstrong argued in a Feb. 12 Twitter post that Coinbase’s staking services are not securities and would “happily defend this in court if needed.”

Coinbase's staking services are not securities. We will happily defend this in court if needed.https://t.co/GtTOz77YV3
— Brian Armstrong (@brian_armstrong) February 12, 2023

Judge’s rulings in landmark cases create a legal precedent. If such a case were brought to court and a judge decided Coinbase’s staking services did not classify as securities, other crypto companies in a similar position could use the precedent as part of their defense.

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