Under the guise of preventing sanctions evasions and money laundering, the Federal government is setting the stage for tracking virtually every transaction of Americans—including anyone who uses cryptos and the likely forthcoming “digital dollar.”
How did we end up in this financial surveillance state?
Partly based on the fast evolving capabilities of technology. And partly owing to the age-old greed and controlling imperatives of society’s elites.
The abuse of power is being advanced by a number of legislative and regulatory plays by the Biden Administration.
The latest is the ridiculously named “Inflation Reduction Act,” which just passed a straight-line party vote in Congress (real CBS News headline: “One thing the Inflation Reduction Act may not do: Lower inflation”).
Those 87 thousand armed IRS agents funded by the bill aren’t going after the masters of the universe like Bill Gates, or the George Soros clan. They’re coming after average Americans, including those trying to stave off a catastrophically eroding dollar by utilizing and investing in cryptos.
A recent Epoch Times article noted that a Republican-backed amendment to the bill that would’ve guaranteed that Americans making less than 400 thousand a year would not be audited at higher rates, was rejected.
As a result of that rejection, as the nonpartisan CBO scores it, the bill will squeeze 20 billion more out of taxpayers. That’s 20 billion Joe Biden swore lower income families wouldn’t be paying.
And as far as crypto goes, even modest dabblers are likely to be targeted.
Of course, the irony is that the government’s criminal dereliction of duty in sustaining sound money is precisely what opened the door to cryptos in the first place.
The Biden Attack On American Financial Rights
The passage in 2021 of a three trillion dollar spending package that included vastly reduced trigger points for government surveillance of banking transactions, was an incendiary escalation in financial surveillance for the Biden regime.
The law required financial institutions to report all transactions from accounts holding more than 600 dollars. The former trigger amount was 10 thousand.
Sold as a way to catch tax evaders and help pay for the monstrous spending bill, the new regulation only represented an encroachment and abuse of American rights to financial freedom and privacy as the Heritage Foundation noted at the time:
The requirement for banks to report on the accounts of their customers to the Internal Revenue Service is just another way for the federal government to embolden its regulatory regime, and simply opens more ways for a historically weaponized Internal Revenue Service to go after American citizens.
Joel Griffith, Heritage’s research fellow in financial regulations, said, “Smaller financial institutions will face onerous compliance costs. Ultimately, everyday families and businesses experience a loss of personal privacy, higher checking account fees, lower yields on savings, and fewer free services as a result.”
On the heels of the “600 dollar” surveillance, the U.S. and Canada coordinated in early 2022 to snuff out the Canadian Truckers Convoy protest.
Government authorities shut down bank accounts associated with the protest, and even required social media crowdfunding platforms (in the case of the conservative GiveSendGo site) to shutter campaigns supporting the encamped truckers.
The Feds also did their best to identify bitcoin and other crypto addresses tied to the protest movement, and disrupt those funding avenues.
Of course, governments can’t stop a bitcoin transaction between two non-custodial wallets. But they could do their best to identify and arrest people “violating” their orders not to fund the “illegal protest.” And that’s exactly what they did.
Russia – Ukraine Conflict Opens Door To Further Financial Surveillance Abuse
Cryptos came under new attack as a vector for “sanction avoidance,” when the U.S. further weaponized the international Swift settlements system, to try to punish Russia for events which escalated dramatically in February.
Quite rationally, Russia, China, India and other nations have resented the U.S. led sanctions. That has given new life to long simmering efforts by those countries to create an alternative BRICS monetary standard to the Swift “petro-dollar.”
The U.S. CBDC “AntiCrypto”: A Ring of Power for Financial Tyranny
The international challenges precipitated by BRICS are now compounding horrendous U.S. domestic policies which are rendering the inflationation-ridden dollar less and less attractive.
Against that backdrop, the U.S. is currently deciding what to do about cryptos, and laying out the future of the dollar.
The U.S. could choose a path that allowed private permissionless blockchains to provide what central banks and politicians have thoroughly corrupted—sound money, low-cost payments with near instant settlements, and other innovations which promise to make banks and even the legacy stock market system (at least as they are currently composed) obsolete. (See “COULD STABLECOINS SAVE THE DOLLAR?” 9 Aug 2022.)
The power of crypto technology is enormous—and terrifying to governments which siphon obscene amounts of wealth in various ways off the current financial system.
Cryptos, like most technology, come with potential to be used for empowering or enslaving people.
Cryptos can facilitate direct trustless interactions, feature transparent Smart Contract code (first introduced on Ethereum blockchain), and even create a digital commodity which can’t be inflated—ie., bitcoin.
Crypto technology can put users in the control of their assets and personal information, via fungible and non-fungible tokens (NFTs).
Cryptos can be built to provide a high degree of privacy (think Monero and ZCash), and to mask transaction chains.
That’s what the decentralized Tornado Cash app does. It bundles and mixes transactions between large numbers of crypto wallets to anonymize transaction chains.
The SEC crackdown against Tornado last week was another step in criminalizing the long established rights of Americans to transact with each other without the government knowing and spying on that activity.
The fact that criminals abuse a right does not give the Federal government the authority to suspend and violate Constitutional rights of Americans.
If the Federal government really cared about Russia “aggression” or “drug Cartels,” it could quit its penchant for instigating wars, enforce U.S. borders, and crack down on pushers peddling the most dangerous synthetic drugs.
But of course, the Biden Administration isn’t doing any of that. Elites obviously enrich and sustain themselves in one way or another via wars, and open border policies, though the rest of society suffers.
TRENDPOST: If Democrats manage to keep hold of Congress in November, look for a fast-tracking of the “AntiCrypto”: a U.S. CBDC, and a simultaneous hard-core crackdown on private crypto powered blockchains.
Bitcoin will lose, at least in the short term. So will other private permissionless crypto blockchains, “green” or not.
What will a US CBDC look like? It will tell the government virtually everything it wants to know about how it is being transacted, and by whom. It will have mechanisms to allow it to be “turned off” by the government at any time.
In other words, it will be a digital tool with the surveillance and control legislation baked right into the technology itself. Legislative and regulatory updates will be rolled out, the way software updates are rolled out to software operating systems.
The worst potentials of crypto technology will manifest, because the worst potentials of humans themselves—the age-old desire to wield power over others for selfish gain—will have won.
It will be a pyrrhic victory of course, because that kind of digital dollar will only speed the sunsetting of the American experiment.
Addendum: The “3rd Party” Ruling That Eroded 4th Amendment Privacy Rights
For those that want to delve into how 4th Amendment privacy protections that should extend to financial transactions and banking were eroded, the Cato Institute has an illuminating article from October 2021.
The article notes that a 1976 Supreme Court Decision, United States v. Miller, held that one cannot reasonably expect privacy when providing information to a third party.
Cato pointed out that:
“In the case of bank account information, the Court wrote, ‘The depositor takes the risk, in revealing his [or her] affairs to another, that the information will be conveyed by that person to the Government.’ This ruling is what came to be known as the ‘third‐party doctrine.’ And it is this ruling that allowed the government to surveil bank accounts long before the $600 proposal came along.”
Perhaps ironically, the extremely commonplace requirements for people to hand over reams of personal data in order to use services and apps in the digital age has led to a wholesale destruction of meaningful 4th amendment protections.
The Cato story quotes even current Supreme Court Justice Sonia Sotomayer (an Obama – Biden Administration pick) criticizing the 1976 United States v. Miller ruling as being inadequate in the digital age. Writing in a case (United States v. Jones) in 2012, Sotomayer observed:
“More fundamentally, it may be necessary to reconsider the premise that an individual has no reasonable expectation of privacy in information voluntarily disclosed to third parties. This approach is ill suited to the digital age, in which people reveal a great deal of information about themselves to third parties in the course of carrying out mundane tasks.”
The Cato Institute article can be read here.