"The term “CVC mixing” means the facilitation of CVC transactions in a manner that obfuscates the source, destination, or amount involved in one or more transactions, regardless of the type of protocol or service used"

— FinCEN proposal for cryptocurrency mixers

If this proposal is accepted, any tool that might provide you privacy in your transactions will be considered a tool that finances terrorism.

The FinCEN agency at the Department of the Treasury wants you to have no privacy.

You must act now and leave a comment on the proposal rejecting it.

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The FinCEN agency within the US Department of Treasury just released a proposal for new rules that make any option of privacy in your cryptocurrency transactions suspect of financing terrorism. They are applying the PATRIOT act to cryptocurrency transactions as a whole, something that the agency acknowledges has never done before for a class of transactions.

Financial privacy is privacy. Anything else just brings us to the Orwellian world of 1984.

Multiple websites have already posted thorough analysis of this new rule and the implications to regular citizens like you and me.

The US government is declaring cryptocurrency akin to terrorism. This is both a disgrace and unsurprising.

The government fought against your right to privacy in digital communications. They didn't want you to have end-to-end encrypted communications but they lost. And now, just like then, the excuse is the same: bad guys like privacy.

The reality is that EVERYBODY likes privacy. Bad guys also use phones to coordinate. They use guns, cars, and overwhelmingly. the use US dollars to finance their operations. Should we consider cell phones tool of terrorism? Is the US dollar a tool of terrorism?

Any person who loves democracy should demand the immediate repealing of the PATRIOT act.

Analysis of the proposed regulations

Here are the best articles out there summarizing the ruling:

The reality: all this is bullshit

The reality is that the US government is afraid of Bitcoin and will use any excuse to attack it.

Illicit transactions represent 0.25% of the total cryptocurrency transactions.

Illicit transactions represent between 2% and 5% of the total transactions done with fiat currencies like the US dollar.

Which currency is REALLY funding terrorism? According to the US government, it's cryptocurrencies.

Take action. Comment on the proposal

You must comment on the proposal. The page for comments is here. Make sure to submit as an anonymous person if you don't want your name and address made publicly available with the comment.

The best way to comment is to take the output generated by ChatGPT and add some personal bits to it.

Here is what ChatGPT created for me:

I am writing to express my vehement opposition to the proposed Special Measure Regarding Convertible Virtual Currency Mixing as a Class of Transactions of Primary Money Laundering Concern.

This proposal has raised significant concerns, and I believe it would be a grave mistake to implement it in its current form.

While I understand the importance of addressing money laundering and other illicit financial activities, this proposed measure would have far-reaching consequences for individuals and businesses involved in the legitimate use of cryptocurrencies.

The potential risks and harms associated with this proposal greatly outweigh its intended benefits. My objections to this proposal are as follows:

1. Overreach: The proposed measure overly broadens the scope of surveillance and regulation, targeting innocent individuals and entities who engage in legitimate transactions with convertible virtual currencies. It essentially treats everyone as a potential criminal, infringing upon our fundamental rights to financial privacy and freedom.

2. Chilling Effect: If this proposal is implemented, it would create a chilling effect on the adoption and use of cryptocurrencies for lawful purposes. People and businesses would be discouraged from engaging in legitimate financial activities, hindering innovation and economic growth.

3. Privacy Invasion: The proposal infringes on the privacy rights of individuals and entities. It demands intrusive levels of data collection and reporting, undermining our right to financial privacy, which is a cornerstone of a free society.

4. Technical Challenges: The proposal assumes a level of technical knowledge and capability that is often beyond the capacity of many users of cryptocurrencies. Compliance would place an undue burden on individuals and small businesses, discouraging participation in this emerging technology.

5. Ineffectiveness: There is no clear evidence that implementing such a measure will effectively combat money laundering or illicit financial activities. Criminals are likely to find alternative methods to evade detection, while law-abiding users and businesses will bear the brunt of the consequences.

I urge you to reconsider this proposal and explore alternative, more targeted approaches to address money laundering concerns within the cryptocurrency space.

I am not opposed to reasonable and targeted regulatory measures to combat illicit activities, but this proposal, as it stands, is a disproportionate and overreaching response.

I implore you to listen to the concerns of the cryptocurrency community and other stakeholders and to ensure that any regulatory measures put in place are balanced, effective, and respectful of the rights and freedoms of law-abiding citizens and businesses.

Thank you for considering my perspective on this matter. I hope that you will make the right decision for the sake of preserving individual freedoms and encouraging responsible innovation.

Sincerely,

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And here is what I also included to make the message more personal and effective:

Financial privacy is privacy. This proposal is an unconstitutional attack on my financial privacy.

Everyone likes privacy. That includes terrorists. You can't ban privacy because a very small minority of people are doing bad things with it. Are you going to ban end-to-end encrypted messages? Cell phones?

The WSJ article used to demand action by the US Department of Treasury was fake news. Hamas didn't receive $90 million USD in cryptocurrency. Analysis done by Chainalysis (who the US government uses as an expert company when prosecuting people) determined that the amount is more like $450,000. That's a 99% error!

Illicit activities represent approximately 0.25% of total crypto transactions and between 2% and 5% of fiat transactions. Cryptocurrency is not financing terrorism. The US dollar is financing terrorism.

Why don't you go after the big banks and the executives who benefit from all that money laundering of US dollars?

As Sen. Ron Wyden, Chairman of the Senate Finance Committee and member of the Senate Select Committee on Intelligence said: "*The FinCEN Files investigation reinforces the fact that we now have two systems of law enforcement and justice in the country. Drug cartels move millions through US banks; poor people go to jail for possession. If you're wealthy and well-connected, you can figure out how to do an enormous amount of harm to society at large and ensure that it accrues to enormous financial benefit for all of you.”

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Notable notes

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Recommendations

Walker

Walker has been instrumental in getting people at Nostr to take action against this ridiculous regulation.

You can follow him at

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See you again next week! — Alejandro

This newsletter is for educational purposes. It does not represent financial advice. Do your own research before buying Bitcoin.