Financial Surveillance Is Expanding—but So Is the Resistance
bill, see what the Cato Institute’s Adam Michel had to say.)
Samourai Wallet Case Opens New Questions
Back in the courts, the case against Samourai Wallet (a cryptocurrency wallet) is troubling. And new evidence reveals that the case is worse than it previously seemed. A core issue was that the software developers behind Samourai Wallet were charged with operating an unlicensed money transmitter. The problem? The Financial Crimes Enforcement Network (FinCEN)—the agency charged with overseeing these businesses—told the Department of Justice that Samourai Wallet was not acting as a money transmitter. This conversation occurred before the charges were made, and they were withheld from the defense for more than a year.
There are many reasons to criticize FinCEN. It has repeatedly refused to provide concrete data on the effectiveness of financial surveillance, and it appears to have ignored requirements set by Congress. Yet, in this instance, the agency deserves credit for trying to correct the record. It’s a shame that the Department of Justice wasn’t interested. As Coin Center’s Peter Van Valkenburgh put it, “This is more than a legal misstep. It’s a violation of basic fairness, and a warning signal to anyone who builds or publishes general-purpose tools on the internet.”
Congress Pushes Back
With that said, some gems are coming out of the 119th Congress. Senator Mike Lee (R‑UT) introduced the Saving Privacy Act, and Representative John Rose (R‑TN) introduced the Bank Privacy Reform Act. The two bills differ in scope—Senator Lee’s legislation, for instance, would prohibit the creation of a central bank digital currency—but both bills share a critical goal: attacking the major failures of the Bank Secrecy Act regime.
Getting anything through Congress is an uphill battle, especially when it comes to limiting the powers of the government itself. But it is a battle worth fighting. Many of the financial surveillance programs in place today didn’t just appear overnight—they were created, expanded, or authorized by Congress over decades. Therefore, it’s up to Congress to correct these past mistakes. And both Senator Lee and Representative Rose are striving to do that.
Conclusion
The last few months were hectic, but not all bad. Amidst the government surveilling cash, prosecuting people in bad faith, and creating new surveillance mechanisms, there were significant wins. Courts pushed back on overreach and called into question rationales used to expand surveillance for decades. At the same time, Congress began to offer reforms to correct past mistakes.The road ahead won’t be easy, but momentum is building. That is something to be optimistic about.
Nicholas Anthony is Policy Analyst, Center for Monetary and Financial Alternatives, CATO Institute.This article, originally posted to the Cato Institute website, is published courtesy of the Cato Institute.
