This article appeared as a Guest Opinion piece by our Executive Director, Sarah Roth Gaudette on The Dig Boston. See original here.
I am a big fan of Senator Warren. While I respect and agree with her on a number of issues, her stance on decentralized and peer-to-peer technology has been disheartening to see. Last week, Sen. Warren introduced the Digital Asset Sanctions Compliance Enhancement Act, seemingly to ensure that sanctions imposed on Russia for the invasion of Ukraine are not circumvented using cryptocurrency. However, this Bill is a sweeping threat for anyone who builds, operates, or uses peer to peer or open source online networks, even if they have no knowledge or intent to help evade sanctions or participate in cryptocurrency projects.
In the fall of 2012, I personally knocked on hundreds of doors to make the case for why I believed that we should elect now Senator Warren to be our representative in DC. For that reason alone, I can’t let this slide. Of all the things that my Senator could be focused on right now, she’s created a bad solution for a problem that doesn’t exist. There is no data suggesting that cryptocurrency has been used–or can meaningfully be used–by sanctioned parties to evade sanctions. Industry experts, the US treasury department, other US officials, and even FBI Director Christopher Wray have clearly expressed that cryptocurrency is an overestimated and poor tool for sanctions evasion and one that they have well under control.
The bill calls for sanctions on anyone who “significantly and materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of any [sanctioned] person.” There are a number of ways a person can be said to provide “material,” “technical support,” or “open source software” “goods” to power cryptocurrency networks that are entirely legal. The language of this Bill is so broad that it could threaten anyone whose software could be used to access cryptocurrency. This includes someone contributing to an open source software project like Mozilla’s Firefox Browser, running nodes on peer-to-peer networks, or mining or validating transactions on blockchains. Open source software is the bedrock on which much of the internet is built, fostering open collaboration, allowing users to adapt software to their personal needs, and in many cases, improving privacy and security for users. Russian and Ukrainian Internet users alike are right now learning to use tools such as Signal or Tor to beat Putin’s Internet crackdown to block information about the war in Ukraine.
This is a disappointing and opportunistic use of the disastrous situation in Europe. To see Senator Warren exploiting this war and the humanitarian crisis to push for policies that hurt human rights makes me question whether or not I can support her in the future. This legislation threatens volunteers whose work keeps the Internet alive with dire punishment for something they cannot control. It also threatens well-intentioned families like mine—if my household installs a Tor Snowflake Proxy on one of our computers to help people around the globe circumvent censorship, should we be subject to sanctions?
This is not the careful, people-first work that I have come to respect Senator Warren for. She is right that there is need for more scrutiny and regulation where cryptocurrency is concerned. It makes perfect sense to address scams and lax security on cryptocurrency platforms. We should have reporting requirements for large cryptocurrency exchanges, and require them to comply with sanctions, which they are currently doing—but it is dangerous to threaten the right to code. If governments can dictate what kind of code we write, they can mandate things like surveillance backdoors or demand that tools and platforms be built specifically to enable state censorship. Casting a net this wide might impact projects such Filecoin, a decentralized storage network that supports building on web3 as well as distributed cloud storage or the CENO Browser that circumvents Internet censorship infrastructure and allows users living in censored areas to share retrieved content with each other, peer to peer. It could even impact the Associated Press, an independent global news organization dedicated to factual reporting, as it explores using blockchains to provide trusted and verified data on US race calls, economic data, sports game outcomes, and business financials.
Sponsors of this bill risk losing their credibility on this topic if they continue pushing opportunistic, poorly drafted and unconstitutional legislation like this. Digital assets and the internet cannot be regulated as a monolith. New laws for emerging technology should be “surgical”, thoughtful, and take a human rights based approach. I urge Sen. Warren and other lawmakers to approach legislation related to new technologies carefully, and consider the impact that any potential regulation might have on users, amongst whom are communities of color, low income people, and others who have faced discrimination from traditional, and often predatory, Big Tech companies, banks, and financial services—as well as from authoritarian governments.