G-20 and FATF should not infringe on the human right to privacy by prescribing mass surveillance for virtual assets !

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June 09, 2019

Over the next two weeks, we will see all kind of news reports about the G20 Ministers of Finance discussing and deciding on virtual assets. One of the most damaging recommendations is hidden in an interpretive note (article 7b).

Essentially it requires the private sector to build in a privacy leaking front-door in all blockchain applications, so that law enforcement officials in the whole world will have useful information already available nearby (rather than having to ask for it when need arises).

We will see the FATF adopting this rule in their 16-20 June meeting. And then the G-20 heads of state will be adopting it in Osaka. There will be many news bulletins and spins outlining how important and good these steps are. 

However, there is no reason to boast about it or be happy. What we are witnessing is a fundamentally undemocratic process leading to the adoption of a mass-surveillance rule for virtual assets, which violates the human right to privacy.

State vs citizens: police versus privacy 

There has not been a sufficient and proper political debate on the balance between human rights and anti-terrorism measures, leading up to the adoption of the FATF-recommendation and subsequent G-20 decisions. It's striking that the FATF for example, chose to ignore many relevant private sector suggestions in the consultation to better balance those interests.

But we do already have Human Right Treaties in place outlining that mass surveillance and retaining of data of innocent people are a human right infringement. We can therefore only conclude that our Ministries of Finance and Governments are about to make a historical and major mistake that violate their own commitments to privacy.

We have been here before: FATF-7 and its follow up

It is important to note that we have been here before. There is an excellent dissertation that outlines how a similar measure in the banking domain (the travel rule) was first rejected in US congress, to be adopted within weeks after the 9/11 attack. The dissertation also shows the mechanism of depolitization: making something a technical 'thingy' in order to avoid the true political debate on public interests that need to be balanced.

Similarly, we should recall the discussions and vision of Phil Zimmerman, when he invented Pretty Good Privacy. I vividly remember an inspiring and visionary speech that he gave on the fundamental considerations and power balance that is needed to maintain our democracies in a digital age. This includes the understanding that it is good for the survival of all democracies to have areas and activities which cannot and should not be monitored/controlled.

"Zimmerman outlined one very significant theme during his speech. He noted that the assumption of a continuous benevolent government is not realistic. Governments come and go, some may be more democratic than others and even strong democracies may turn into dictatorships, depending on the circumstances. It is therefore important to design society, governments and the technologies that we use to manage society, guarantee that a balance exists between the powers of government and those of the public. The public, the people should always be allowed to remain digitally out of sight of government. Such a robust structure would be important to ensure a fair treatment of the people over a long period of time."

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