US cryptocurrency legislation (Re: FSFE and the war in Europe)

[Paul Boddie]

On Friday, 18 March 2022 17:04:27 CET fsfe at centromere.net wrote:
> On Fri, 18 Mar 2022 12:41:44 +0100 Paul Boddie <paul at boddie.org.uk> wrote:
> > On Friday, 18 March 2022 10:18:06 CET fsfe at centromere.net wrote:
> > > Perhaps a statement about this pending legislation would be
> > > relevant and on topic for FSFE:
> > > 
> > > https://www.coincenter.org/new-crypto-sanctions-bill-targets-publishing-> > > code -facilitating-transactions/
> > 
> > A statement about US legislation targeting cryptocurrency exchanges
> > that allegedly facilitate sanctions evasion?
> 
> My understanding is that the legislation is going to attack node
> operators -- i.e. users of free/open source software.

Alright, but this is US legislation. So, what can the FSFE do about it? Is it 
more important that the FSFE make a statement about this than, say, the war on 
Ukraine which may actually affect FSFE members directly?

> My intent is to draw attention to the fact that code is speech, and any
> effort to stop people from writing and distributing code is an attack
> on free speech itself.

Is it stopping people from writing and distributing code, though? If the 
legislation is as draconian as these lobbyists suggest, Free Software 
developers would be one of many, many affected interests. For a start, some 
very big corporations would be on the hook for facilitating "crypto" 
transactions. Are the likes of IBM, Dell, HP, Microsoft worried?

I think that if I were American, wrote some fairly generic code, and then 
unbeknown to me it ended up running a "crypto" exchange and I were hauled into 
court to account for my "crimes", the whole thing would overturn the basic 
legal framework of that nation. If the software were "cryptoexchange in a 
box", things might be slightly different but you can probably go to jail just 
for writing malware today.

Obviously, malware is rather different in fundamental character from something 
which might pass as a general trading or exchange platform, which would make 
pursuing developers a lot more complicated in the latter case. However, you 
can bet that there is an entire, well-established industry around financial 
services that would be at risk from such a law and very motivated to see it 
fail.

> > Free Software developers definitely need protection from bad law, but
> > the "crypto" business does not deserve our sympathy.
> 
> If you don't stand up for the worst of society, don't expect others to
> stand up for you.

Well, I will stand up for basic freedoms, certainly. But I am not about to be 
cajoled into propping up the activities of "the worst of society", or wherever 
the "crypto" business sits in those rankings, on the say-so of some Washington 
lobbyists. And again, they are Washington lobbyists, even though I concede 
that what happens "over there" could also happen "over here".

Then again, I think that a lot more needs to be done with regard to financial 
transparency and tackling fraud and corruption, and I imagine that sooner or 
later the "crypto" exchanges will receive even more scrutiny than they already 
do. Although people will protest restrictions on their supposed freedoms, I 
will observe that some of these people have not particularly noble motivations 
for resisting further regulation and the curtailment of their activities.

> > In case you might be wondering, the author there is Andrew Tanenbaum
> > whose reputation in computer science is well established. And he
> > isn't wrong about how people have been rather too easily convinced
> > that "crypto" offers a solution to problems that could otherwise be
> > easily fixed if people genuinely cared about things like poverty and
> > opportunity.
> 
> I will not deny that some people are motivated by greed and use virtual
> currency to get rich quick. Nor will I deny that some people think
> "blockchain" is a magical data structure that can solve all the worlds
> problems. I don't think those facts are relevant, because my focus
> remains on free speech, even the speech of those with whom I disagree.

Free speech is not limitless, though, even though there are swathes of the 
electorate in the US and other places who fail to recognise this. People do 
actually have a right to be protected from harm, and that necessarily 
restricts the capacity of other people to harm them. Don't bother quoting 
Voltaire on this, as is so often done: many readers of this list are likely to 
be living in countries where there is no "absolute" free speech and 
justifiably so.

Anyway, here is the act itself:

https://www.menendez.senate.gov/imo/media/doc/
digital_asset_sanctions_compliance_enhancement_act_of_2022.pdf

Not being a lawyer, maybe I am not reading the act correctly, but "open-source 
software" is mentioned as a mere artefact alongside "any communication 
protocol" and other things in the context of the deliberate acts of 
individuals conducting sanctions-busting distributed finance operations. If 
you want to read that in the broadest possible (and probably nonsensical) way, 
that would be one huge dragnet incriminating quite a few people.

To be honest, having spent some time looking into this, it all feels like an 
opportunity for a bunch of "crypto" profiteers to get others to defend their 
turf in some kind of moral panic: a predictably juvenile "government is coming 
to get you" ruse. So, now I would actually be even happier to no longer have 
them wasting everybody else's time.

Paul