This is the sixth post in a series of eight about the discussions, leadership and community created at the first inaugural Blockchain Law for Social Good Conference held on October 20-21, 2022.
This post features a fireside chat between the Center’s founding director, Professor Michele Neitz, and Marta Belcher, General Counsel and Head of Policy at Protocol Labs and President and Board Chair of the Filecoin Foundation. Professor Neitz and Ms. Belcher focused their discussion on privacy law and blockchain technology.
The conversation began with Ms. Belcher articulating what she believes are topline issues relating to privacy law in the blockchain space. She emphasized that as governments around the world are trying to expand their pre-existing laws to cover blockchain transactions and blockchain-based technology applications they continue to press forward with an outdated and “surveillance” style policy approach. Ms. Belcher continued on by saying that we live in a world where we have grown used to the idea that the government is watching our transactions; by trying to place the same scrutiny on blockchain based financial transactions, the government is trying to monitor all of these transactions as well. This fundamentally goes against the core tenants of the blockchain community, which is focused on decentralization.
When discussing the Tornado Cash example, Ms. Belcher raised an important question: Is it okay that the United States government is targeting technologies merely because they enable anonymous or more private transactions? In bringing up this question, Ms. Belcher continued on to say that the main question is whether it’s okay in our society that the government is taking the position that making private transactions is illegal. When asked by Professor Neitz about arguments that favor monitoring in cases of funding terrorism or other illegal activities, Ms. Belcher stated that these arguments aren’t new. She stated that fundamentally, there is a big gap in technology and action. She brought up the example of how in the 1980s, studios tried to get VCRs banned because they could be used for copyright infringement. She mentioned this because any new technology that is seen to even be a small part of crimes is considered to be generally bad by many.
In response to Professor Neitz’s questions about how she feels about the legislative efforts surrounding this space, Ms. Belcher stated that she feels that there are many ways in which legislation can go wrong and can go right. She emphasized that the point of blockchain technology is to protect individual privacy and civil liberties in a time where we as a society have accepted being constantly monitored. Many of the proposals are just fundamentally against how blockchain technology works. She felt that it is important for regulators to understand that if they want to continue working towards data privacy, they must not stymie blockchain technology and regulators need to step away from regulating technologies and focus more heavily on activities and bad actors. She brought up the point that fraud is fraud, whether you commit it by phone, pen and paper, or even by email. It doesn’t matter what technology a person is using.
One of the challenges that Ms. Belcher sees in this space is the tension between adoption of this new technology and preserving the fundamental principles that underlie blockchain technologies. Though many people want the technology to be used on a large scale, the core fundamentals of decentralization need to be maintained. Blockchain technology provides people with the ability to have anonymity in the same way that cash provides this opportunity.
Ms. Belcher’s discussion with Professor Neitz brought up some great points. The main one being how can we balance the advancement of technology and retain the decentralized aspects of it? One thing to think about is how much surveillance are we okay with? Though there are ways to remain anonymous in certain areas, is it acceptable for our information and preferences to be in the hands of data collectors and monitors? Hopefully regulators and people that work in the blockchain space will be able to come to a consensus about how to move forward.
