Washington-based crypto think tank Coin Center called a financial provision enshrined in the US treasury’s bill unconstitutional and has filed a lawsuit in a federal district court.
The controversial rule required individuals and businesses who receive $10,000 or more in crypto to provide personal details of themselves as well as the contributors’ to the government.
The personal details include a person’s date of birth and the social security number which the research group claimed would attract “unreasonable searches and seizures” and is a violation of the Fourth Amendment.
Coin Center released a blog detailing why it thinks the financial surveillance is a clear overreach of the government to force citizens to snoop on each other without a warrant.
As per the post, the 6050I provision isn’t aimed at collecting information from “third parties”; in fact, it “demands that the persons directly participating in a transaction occurring without banks or other intermediaries report about themselves and the people they are paying or who are paying them.”
The crypto-based firm stressed there should be reasonable suspicion warranting the search
It then argues that there should be a rational explanation justifying accessing the private details of the parties involved.
If there’s no third party to a transaction then there’s no third-party doctrine to obviate the need for warrants. If the government wants us to report directly about ourselves and the people with whom we transact, it should prove before a judge that it has reasonable suspicion warranting a search of our private papers.
Besides that, the controversial amendment might expose the reported names to a potentially corrupt policing authority which it alleges would discourage others to join these organizations, or contribute “and would substantially chill political association and therefore is unconstitutional.”
“We intend to win this challenge even if it’s necessary to go to the Supreme Court, and we’ll keep you posted as the case unfolds”, the crypto-focused group wrote in the blog.
A few days ago, Wally Adeyemo, deputy secretary of the Treasury dept, stated that storing crypto anonymously outside of regulated space enables people to bypass sanctions and anti-money laundering [AML] checks.
Speaking at the ongoing Consensus 2022, Adeyemo warned that unhosted wallets allow inadvertent transactions with criminals or sanctioned individuals.