The cryptocurrency market has grown at an extraordinary pace. From January 2017 to June 2017, the cryptocurrency market cap has grown by over 6 billion and increasing. This has led to a ton of overnight millionaires and new found financial freedom. It’s being called the online “gold rush” where average Joes and billionaires alike like, Mark Cuban, has joined this rush. As the cryptocurrency community continues to grow and new eyes loom on the project; congressman and lawmakers are trying to find ways to regulate it.
Cryptocurrency is being linked to numerous money laundering scandals and people who own cryptocurrency can avoid paying taxes. Since cryptocurrency is so disruptive, congressman and bankers have no idea how to combat this issue. Even former President Barack Obama has given his opinion on Bitcoin calling it “a Swiss bank account in your pocket.” Since then, the government has taken extreme measures to try to combat this issue. Most recently the S.1241 – Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017, this act is one of the numerous acts that is challenging the cryptocurrency space. However, the problem is how will Congress know that you even own cryptocurrency when some crypto markets offer identity security features?
The Anonymous Epidemic
The problem with every law that tries to combat Bitcoin or any cryptocurrency is how anonymous the process can be. There isn’t a single way you can discover who owns bitcoin or any other cryptocurrency without violating their privacy. Privacy is such a fragile topic regarding internet monitoring. Since it’s rise in popularity, governments have tried their best to prohibit the Internet for their own personal gain. This gain could be taxes, anti-terrorism procedures, or keep track of criminal activities. Even though the government can’t keep track of your every move on the internet legally (In the U.S.A), they can discover old data in your computer. Data never fully leaves your computer no matter how hard you try to erase it or bury it. This was famously used to identify and explore the background of the Pulse Nightclub shooter. Though there haven’t been any experiments, government officials have stated that the Pulse shooting could’ve been prevented if internet monitoring laws existed. This leads to questions as of what if the government could monitor everything we do on the internet, and what that would mean for cryptocurrency?
An uncertain future of net neutrality and internet monitoring.
Along with internet monitoring, there is a much greater evil lurking around the tech space that could possibly effect cryptocurrency named neutrality. Without going into detail, net neutrality can create a monopoly of one internet service provider which in the long run can allow the government job of tracking easier: effecting cryptocurrency tremendous. Net neutrality has been the buzzword of tech lovers for the past few months with Congress closing on passing a bill that allows this. Large internet based corporations like Pornhub, Reddit, and Netflix are protesting net neutrality in their own unique way. While these corporations could be endangered by net neutrality one specific group that can be affected are younger investors. Since net neutrality raises prices of internet service for younger consumers, this can lead to the less spare money they own. This will seldom affect investors as the safety net of investing in cryptocurrency decreases. This along with internet monitoring will neutralize every person that plans on investing in cryptocurrency since it can be a bigger risk. Finally, this will in long-term allow cryptocurrency to be easily taxable.
Why S.1241 could be it.
Recently, Congress has created the S.1241 law and it’s being dubbed the “Money is Evil” law. This law attacks cryptocurrency and money laundering hard. In addition, it attacks coupons, digital transactions, and all foreign bank records. This is evident in Sec 13 of the law where they go into detail of stopping digital currencies transactions. Here are some scripts from sec 13.
“prepaid access device’ means an electronic device or vehicle, such as a card, plate, code, number, electronic serial number, mobile identification number, personal identification number, or other instrument, that provides a portal to funds or the value of funds that have been paid in advance and can be retrievable and transferable at some point in the future.”
Along with that, there are numerous different scripts that go into detail stating that each device that a person owns is automatically accredited to being used to purchase financial assets. Later, the law states that each device and service that offers the purchasing of financial assets is subject to being tracked. This is still very much in development but if the law does pass cryptocurrency could be in big trouble.