Ryze Recap 7/20: The US Govt Wants to Know Everything About Your Crypto

It’s Monday, July 20. If you're new here— Ryze Recaps is a newsletter covering the biggest news Bitcoiners need to know in 2 mins or less.

We’ve got one main story for you today.

US Government Ramping Up Crypto Surveillance Efforts

Early June, we reported that the US Government has started working with Coinbase Analytics, the crypto giant’s blockchain surveillance arm. We’re seeing a continuation of this trend, with a significant uptick in government involvement around Bitcoin, cryptocurrency, and blockchain.

What we’re seeing:

  • Coinbase Analytics was initially rumored to have contracts with the DEA and IRS. Now, details have been publically released about a $50K contract with the Secret Service, and a $237K contract with the IRS.

  • The Department of Justice is actively hiring a crypto-asset attorney advisor, as it seeks to crack down on international crime. The DOJ is concerned with the use of the dark web and crypto-assets to fuel “sophisticated transnational organized crime threats,” specifically in Eastern Europe, Central Asia, and the Asia Pacific.

  • The IRS even tried to use the Stafford Act, which is intended to provide emergency disaster relief, to license blockchain surveillance software from analytics firm Elliptic. The Stafford Act was invoked to provide federal aid to states during the COVID-19 Pandemic. It’s unclear whether the pandemic has anything to do with the IRS’s need for crypto surveillance, but it seems that they tried to abuse this Act to get their way on an unrelated issue.

What they’re saying:

Why it matters:

  • Brian Armstrong’s argument for selling analytics software to the government is essentially along the lines of “We had to build it anyway, might as well sell it to the government if they want it.” This isn’t very compelling, and the Bitcoin community didn’t take his defense very well.

  • Bitcoin was created in part to reduce the role of government in money. While regulation is important for consumer protections, some would argue that selling software that helps the government track and surveil these assets is the antithesis of why Bitcoin was created.

That’s all for today! We’ll be back again with another Ryze Recap.

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Written by Ryze Financial— helping you understand and invest in Bitcoin, on your own terms.