Saving Privacy Act
Weekly Crypto Policy Brief 10.4.24
Good morning and happy October. With Congress out of session, a short and sweet edition this week highlighting a new financial privacy bill, an imminent SEC departure, and a few updates from DC and the campaign trail.
Top Points
Senators Mike Lee (R-UT) and Rick Scott (R-FL) introduced the Saving Privacy Act - a bill to drastically reduce federal agencies' access to Americans' financial information without first obtaining a warrant.
SEC Enforcement Director Gurbir Grewal is leaving the agency on October 11.
The Saving Privacy Act
On September 25th, Senators Mike Lee (R-UT) and Rick Scott (R-FL) introduced the “Saving Privacy Act.”
In short, the bill would significantly limit federal agencies’ access to Americans’ personal financial information by amending the Right to Financial Privacy Act of 1978 and the Bank Secrecy Act.
For example, the bill would:
Repeal various reporting provisions under the Bank Secrecy Act, including Suspicious Activity Reports and Currency Transaction Reports, while keeping certain recordkeeping requirements. See § 101(b)(3) (striking 31 U.S.C. §§ 5313, 5314, 5315, 5316, 5317, 5318A, 5324, 5326, 5331, 5332, and 5336).
Amend the Right to Financial Privacy Act to narrow circumstances under which federal agencies can access U.S. citizens' financial information without a warrant. See §§ 101(a), 201.
Repeal the Corporate Transparency Act, which requires businesses to report information about their ownership to FinCEN. § 101.
Repeal the SEC’s Consolidated Audit Trail database, which has already sparked privacy concerns and a legal challenge from the DeFi Education Fund and Blockchain Association. § 301.
Prohibit federal agencies from creating a database of personally identifiable information of U.S. citizens in the future without clear Congressional authorization. Id.
Impose penalties on federal employees who illegally seek constitutionally protected financial information. Title VI.
As for CBDCs, the bill would:
Prohibit the Fed, Treasury, or any other agency from minting or issuing a CBDC directly to individuals or indirectly through an intermediary. § 401.
The bill also aims to broadly rein in federal agencies' power by:
Requiring Congressional review and approval of any regulations determined to be a major rule, and an opportunity for Congress to disapprove of any non-major rules. § 502.
Major rules would be those likely to result in an annual economic impact of $100 million or more; a major increase in costs/prices for consumers, industries, or governments; significant adverse effects on U.S. businesses; or an increase in mandatory vaccinations.
So What?
The bill has been referred to the Senate Committee on Homeland Security and Governmental Affairs.
It is unlikely to move this year, but serves as a marker of financial privacy advocates' priorities/wish list heading into next Congress.
Enforcement Director To Leave SEC
On Wednesday, the SEC announced that Gurbir Grewal, the Director of Enforcement, is leaving the SEC on October 11.
Sanjay Wadhwa will replace Grewal by serving as Acting Director.
In its press release announcing the sudden departure (less than two weeks notice), the SEC specifically recognized Grewal's “leadership” on recommending over 100 enforcement actions in the crypto space, citing ongoing cases against Binance and Coinbase:
Chair Gensler's statement:
Today we announced that Gurbir S. Grewal, Director of the Division of Enforcement, will depart the agency, effective Oct. 11, 2024. sec.gov/newsroom/press…
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Members of Congress react:
House Republican Whip Tom Emmer (R-MN)
Rep. French Hill (R-AR) - HFSC Digital Asset Subcomm Chair
Look Ahead
A message from the Coinbase Institute
Join us for the DC Privacy Summit!
Explore the future of privacy online with leading technologists, privacy advocates, and policy-minded professionals.
Thursday - October 24, 2024
USC Capital Campus - Washington, D.C.
- RSVP Required -
Produced by the journalism team at Project Glitch and presented by PGP* for Crypto, this first-of-its kind privacy summit brings together an elite lineup of technologists, researchers, and policy experts to explore the intersection of decentralized networks, advanced cryptography, and the law.
Election: Tuesday, November 5.
Congress returns: November 12.
Quick Hits
Congress
Bring Tigran Home
Rep. Rich McCormick (R-GA) and Tigran's wife, Yuki, joined the “Designated” podcast to discuss efforts to bring Tigran home and the devastating impact his detention is having on his wife and young kids (ages 5 & 10).
Tigran Gambaryan has been detained since February, reportedly without adequate medical care.
According to Rep. McCormick:
“This is an obvious case of holding somebody hostage to punish a business they have a problem with. He's just being treated absolutely horribly and he is an American citizen, and that should be taken very seriously by our government.”
Podcast.
Recap by Coin Desk's Amitoj Singh: “Is Daddy on the Airplane? Jailed Binance Exec Tigran Gambaryan Family's Ordeal in New Podcast”
Strategic Bitcoin Reserve
Rep. Ro Khanna (D-CA) embraces idea of a strategic bitcoin reserve, telling Sam Lyman of Forbes:
“[B]itcoin that has been seized by the U.S. government should be used as a strategic reserve asset given its potential for appreciation.”
Full Forbes Article by Lyman here: “Bipartisan Support Builds For Strategic Bitcoin Reserve.”
GOP Majority Whip Tom Emmer
Republican Whip Tom Emmer tells Mainnet crowd that Republicans would push to cut SEC funding if they control the House next Congress.
Whip Emmer also tells Decrypt that aspects of FIT 21 could get included in a year-end spending bill.
DePIN Fly In
Blockchain Association hosted a fly in focused on educating Hill staffers on decentralized physical infrastructure networks (DePIN).
Industry participants included: Helium, Filecoin Foundation, GEODNET, CESS Network, Hivemapper, Multicoin Capital, Coin Fund, and Storj.
2024 Election
Polling
Grayscale, Coinbase, and Consensys partnered with pollsters to survey the potential impact of crypto owners on the 2024 election.
Key Takeaways: Crypto owners may comprise a significant enough voting bloc to impact elections in battleground states, represent a diverse cross-section of the population, and are pretty much evenly spread amongst the Republican and Democratic parties.
Grayscale & The Harris Poll - “Election 2024: The Role of Crypto”
1 Key Finding: More than three quarters (77%) of voters agree that “Presidential candidates should have an informed perspective on innovative technology, like AI or crypto.”
Coinbase & Morning Consult: “10 Things You Should Know About the Crypto Voter”
1 Key Finding: “There are more than sixteen times the number of crypto owners in the seven key battleground states than the vote differential combined in these states in the 2020 Presidential election.”
Consensys & Harris X: “Crypto Voters and the 2024 Election”
1 Key Finding: 40% of all voters are more likely to consider voting for the other party’s candidate if the candidate is pro-crypto.
See also Op-Ed by Bill Hughes, Consensys' Senior Counsel and Director of Global Regulatory Matters: “Kamala Harris knows crypto voters are up for grabs: New polls confirm.”
Articles
Stand With Crypto Endorses 20 Republicans and 19 Democrats, but stays clear of Senate races in Michigan, Arizona, and Ohio (Sander Lutz; Decrypt).
Senate Republican Challengers Make Case For Light-Touch Crypto Regulation at Mainnet (Brady Dale; Axios).
SEC
The SEC will appeal Judge Torres's final judgement in SEC v. Ripple Labs; precise issues to be appealed tbd.
Bitcoin Mining
The U.S. Energy Information Administration published a report examining energy demand by data centers and cryptocurrency miners in Texas.
Report.
Combatting Illicit Finance
Meredith Fitzpatrick, Director of Cryptocurrency Investigations at the Forensic Risk Alliance, breaks down asset recovery in the context of custodial and non-custodial cryptocurrency wallets.
Geofencing
“A Practical Guide to Geofencing” by Variant Fund's Jake Chervinsky (Chief Legal Officer) and & Daniel Barabander (Deputy General Counsel.
Trivia
Last Week's A: Nebraska and Maine do not follow a winner-take-all electoral college model. Instead:
Maine allocates two electoral votes to the statewide winner and one electoral vote to the winner of each congressional district.
Nebraska also allocates two electoral votes to the statewide winner and one electoral vote to the winner of each of its three congressional districts.
This Week's Q: The first vice-presidential debate was held between which two candidates?
Thanks for reading,
-GSL
