The Assistant Attorney General Beth A. Williams has departed from the Justice Department’s Office of Legal Policy (OLP) just weeks after a much criticized crypto enforcement framework was published.
Describing the framework, “it was a complete disaster for privacy and anonymity and civil liberties in the cryptocurrency space,” said Marta Belcher, an attorney at the Electronic Frontier Foundation (EFF).
The framework stated peer to peer exchanges are money services business that need to comply with the Bank Secrecy Act (BSA).
It made no distinction between solely code based decentralized exchanges running on smart contracts and proprietary centralized exchanges that happen to deal in crypto only.
That could open coders to enforcement action with the definition of peer to peer moreover potentially being very broad to include just two individuals that transact with each other.
Those two individuals would need to comply with anti-money laundering requirements that could potentially mean buying a coffee with bitcoin would require some ID.
They further require registrations by privacy platforms that try to obfuscate transactions known as mixers. Again no distinction is made between proprietary privacy platforms and solely code based methods.
“During Ms. Williams’s tenure as Assistant Attorney General, OLP played a lead role in the department’s cyber policies, including coordinating the development of a recent white paper on cryptocurrency as part of the Cyber-Digital Task Force, and undertaking a comprehensive assessment of the department’s work in the cyber area to identify how federal law enforcement can even more effectively accomplish its mission,” the Department of Justice said.
Her departure now hopefully means a new more granular framework will follow that takes into account the unique nature of cryptos, including the fact that they are literally programmable money rather than just a buzzword.
Any regulation therefore needs to make a clear distinction between code based automated and autonomous services, and those that operate more like a company.