Defending developers & Building a privacy preserving alternative to KYC
...And tax-deductible giving to Coin Center
It’s been a busy few months at Coin Center. Here’s a snapshot of what we’ve been working on.
Congress
Our director of policy Jason Somensatto testified in both the House and Senate on cryptocurrency tax issues. He used his time to continue our long-running advocacy for fair treatment of block rewards and a de minimis exemption for day-to-day use of crypto.
The long-awaited “Market Structure” bill passed the House as The Clarity Act. Coin Center fought hard for the inclusion of strong developer protections in the bill and over the line to passage.
We are happy to report that a version of the BRCA is now included in the Senate Banking Committee’s digital asset market structure discussion draft (their analog to the CLARITY Act). Our top goal is keeping those protections in as negotiations unfold.
Read more: Senate market structure negotiations must not sacrifice hard won developer protections
Privacy Preserving Alternatives to KYC
Recognizing that crypto needs to bring solutions—not just critiques—to the AML debate, we’ve launched the John Hancock Project (JHP). The JHP will convene a small working group of cryptographers, developers, and civil liberties advocates to design and prototype alternative AML compliance mechanisms that protect privacy and individual autonomy.
Our goal is to demonstrate that data-minimized, privacy-preserving compliance is not only technically feasible but preferable—and to encourage the Treasury Dept. to formally recognize these approaches as valid under existing law.
By doing so, we aim to advance privacy research and unite the builder community around practical, principled solutions that make open blockchain networks safer and freer.
Read a summary: Digital Identity is broken. The tech to fix it is ready. Here’s how the government can help.
Read the full report: Tear Down this Walled Garden: American Values and Digital Identity
More Work
The Treasury Dept. requested comments on innovative methods to detect illicit activities using stablecoins. Our submission explains that the combination of public blockchain transactions and traditional AML ultimately creates a panopticon worse than than any hypothetical CBDC might be. Read the full comment.
In the “MEV Brothers” case, two brothers were charged with wire fraud for not acting as “honest validators” despite keeping in line with the rules of the Ethereum blockchain. Coin Center filed an amicus brief explaining to the court that this theory of law is inconsistent with the facts of how open blockchains function. Ultimately the trial ended in a mistrial as the issues at play were too complex for a jury, more proof that courts have no place in policing protocol rules. Read our brief.
Inspired partly by that case, executive director Peter Van Valkenburgh gave a mainstage talk at Devconnect warning builders that base layer privacy is essential to protect validator operators and builders of substantive tools. Watch the talk.
Tax-deductible giving to Coin Center
Supporting our mission just got easier. Coin Center’s critical work defending the innovators building permissionless software has been made possible by the generous contributions of those in the community who believe in our mission.
We are pleased to announce the launch of our sister organization, CC Foundation, a 501(c)(3) nonprofit organization that provides an avenue for our supporters to benefit from tax-deductible charitable giving.