alt Hacker NewsThe treasury is expanding the Patriot Act to attack Bitcoin self custody
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The headline is not supported by the article.
The actual list of "suspicious activities" in the article is about pooling, structuring, delaying transactions -- the stuff you do to hide activity, whether for good or bad.
It says nothing whatsoever about self-custody. The author makes the imaginary leap because they say they personally recommend doing all those things with self-custody. But they're totally separate things.
So as far as I can tell, the headline is just false clickbait.
They also claim:
> If enacted, any user who leverages these tools will be flagged as a suspicious... and could potentially be sent to prison.
I don't think that's the case? Having a transaction considered suspicious doesn't send you to prison. At best it seems like traditional banks might not permit a transaction, or it could be used as supporting evidence for separate actual illegal activities like money laundering? But going to prison requires being convicted of an actual crime. Not just activity that is "suspicious".
Bitcoin maximalists are learning that having a non-fungible and fully traceable ledger might be a problem. Even Satoshi called this out! As is, BTC is somewhat of a privacy nightmare. All of your transactions are on the public ledger for anyone with basic knowledge of statistics to correlate and see all of your transactions. Blockchain Analytics is big business!
All the things the Treasury is considering to be "suspicious activity" simply can't be tracked with something that's non-fungible and untracable like Monero. This suspicious activity - aka privacy - is just how all monero transactions are done.
A lot of people keep looking for technology solutions to political problems. The fact is that privacy, especially of financial transactions, is becoming illegal. Any technology that allows you to send or spend money anonymously will be attacked by our governments. They won't be allowed.
You can argue about whether you can get away with it due to difficulty of enforcement, but all that does is turn us all into criminals. They won't put ALL of in jail, but they can put ANY of us in jail - the ones they don't like.
There's a conflict between Bitcoin as a public ledger, privacy, and money laundering.
With a bank you can have anti-money laundering and bank secrecy. Transaction are known by the bank, can be subject to subpoena or automatic reporting, but are non-public.
If you want privacy on Bitcoin you need to do things that look a lot like money laundering. Governments banning money laundering isn't a surprise. The value of Bitcoin, if transactions are fully public and attributable to pseudonyms, is questionable.
In some ways, the problem Bitcoin has is that it is inflexible. Governments want to change the rules in finance from time to time, traditional finance adapts.
sometimes you wonder if people have become so thoroughly captured by the status quo they can no longer even conceive of a monetary system existing that is not entirely dependent on custodians acting on someone's behalf
it's not the developers of bitcoin's fault your entire reg compliance apparatus was constructed on requiring intermediaries
I'm confused how the connection was made between "here are our guidelines for suspicious activity" and "self custody is outlawed"
This would come as no surprise, since all the original promises of Bitcoin circa 15-ish years ago are long dead. The turning point occurred when all exchanges agreed to report transactions directly to the IRS. I say this as someone who had an interest prior to that but lost all interest when the Crypto community sold out its ideals and consented to certain regulations in the interest of mass marketing cryptocurrency for the purpose of speculative profit.
This is pure click bait that relies on a deliberate misreading of a 2023 notice [1] that tries to imply that "self custody" is being attacked in any form.
All that this is saying is that the government will try to track money movement to pursue criminal activity, including, unfortunately the criminal activity of moving money in a way that looks sketchy. This is something that we have decided we have to live with.
[1] https://www.federalregister.gov/documents/2023/10/23/2023-23...
I feel like growing up is realizing that the government is just a big gang. They do what they want and will enforce with menace what they want. They can change the rules, take your stuff and it ain't stealing because they said so. Sigh.
>Loading up a single address with too many UTXOs degrades the entropy of a public-private key pair and makes it easier to brute force a user's private key.
Is there a realistic risk there? If I use an address a million times, how much weaker is it? And how feasible would it be for an attacker to brute for it?
You CANT. It's impossible, the people that operate their own computers running the network will NOT allow a government operated coin.
Inevitable. Remember Roosevelt's gold confiscation.
https://en.m.wikipedia.org/wiki/Executive_Order_6102
It was forbidden to have more than 5 ounces of gold.
Find a way that is costs trump money or prevents him from making money, and this stuff will vanish instantly.
This is inaccurate and in a hilarious way. Treasury is not coming after Bitcoin. There's an update in an ongoing rulemaking process that got reported here[0] as banning mixing and privacy tools. It may have been blown out of proportion[1], but I am not a lawyer, and certainly banning these tools would be bad. The thing is, Bitcoin's not private—every transaction is public for everyone to download. It's Twitter for your bank account. And that comes with serious privacy, safety, and boring commercial counterparty risks that should be addressed. These kinds of tools exist to mitigate that problem. The irony is that Bitcoin has largely refused to address this obvious issue, so no, Treasury isn't coming for Bitcoin. Indeed, there been years of people arguing Bitcoin would be just fine with no privacy protections. [0] https://www.therage.co/us-government-to-bring-patriot-act-to... [1] https://x.com/valkenburgh/status/1966174324701778071"
M question was on what legal/Constitutional basis does the Treasury have for expanding the Patriot Act? Is it because the law provides powers to the Treasury department to define areas that the law should apply? Or is it a case where the administration (once again) is assuming it can do something, the Constitution be damned?
LOL, the BTC people who thought "Digital Gold" was a good slogan are going to learn what happened to self custody of gold and the gold standard.
BTC is in a much worse situation than gold was in 1970. The government has the technology to follow transactions and require BTC transactions to be done on their chain with their BTC equivalent GBTCs. That is until the government decides to issue print more BTC equivalents
Can anyone ballpark a dollar figure for data center time to decrypt the ledger? No rubber hoses allowed.
The screenshot-of-a-screenshot seems to be talking about mixers (e.g. TornadoCash). But ultimately, what did you expect?
Loading up a single address with too many UTXOs degrades the entropy of a public-private key pair
does bitcoin or UTXO's somehow for some reason generate multiple PUBLIC keys for the same private key?
On a long enough timeline, having anything stored in local hardware is going to be suspicious. Not surprised to see government embrace of crypto lead to increased scrutiny.
If there would have been better policing of digital currency by its users against criminal actors, perhaps digital assets would be spared the attention and now regulation. Sadly, increasing adoption and privacy guarantees lure criminals same as legitimate users.
Considering how they're clamping down on anonymity wherever they can, crypto wasnt going to escape their clutches for very long. How long before its seperated from it original aim and just turned into a gambling token.
> Loading up a single address with too many UTXOs degrades the entropy of a public-private key pair and makes it easier to brute force a user's private key.
Well that's not true... The key doesn't change because you added more bitcoin
> We shouldn't have to live in a world where standards cater to the lowest common denominator, in this case criminals, and make things worse off for the overwhelming majority of the population.
The Bitcoin lobby are definitely getting their money's worth.
To the slaughter house ...
As someone who hasn't read the article, is holding bitcoin in your own wallet going to become illegal? Also, which wallet do you guys recommend, I use Coinbase but it sucks.
thats ma boi trump, back at it again with the absolute opposite of what he said hed do!
This author is being disingenuous. All of those actions are indeed suspicious. I am not a fan of the Patriot Act, but these new guidelines actually seem pretty reasonable to me.
I'm convinced the the capital-c Crypto industry hates crypto. Don't use it as a currency! Give us interest free loans (stablecoins) and gamble!
Assuming this is true, how would this be enforced and tracked?
Lobbyists, Assemble!
The article has no references, but even so, it's no wonder that Monero has gone up in the past day.
Self-Custody is problematic for any government as it allows any citizens to accumulate any kind of wealth they have and simply "transfer" it overseas without any oversight and in a ridiculously short amount of time. Some countries (rich/developed countries) allow free capital transfer but these transfers are regulated and also some jurisdictions are sanctioned. Transferring money abroad, from the perspective of the origin country, just moves the money inside the origin country system from one party to another. So it is well within the visibility and control of the state, especially for large amounts of money.
Today, you can brain-memorize $1bn in Bitcoin and move yourself from one country to another; and depending on the country; might be able to exercise different amounts of that purchasing power. Control moves from the origin country to the reception country.
Russia and China were always hostile because of this. The Chinese authorities regarded Bitcoin as some sort of capital flight scheme. Now both Europe and the USA are too. I think Bitcoin only chance for survival, in its current form, is if these two poles do use it as a mechanism to attack one another. Mining is already balanced between East and West.
The tweet says "could be labled suspicious" the article says could be made illegal.
I've never heard of this website but if your only source is a tweet and you misrepresent it, I don't believe it.
I'll take bets: By EOY 2026 it will be legal in the US to use single use addresses
Financial privacy and national security are fundamentally at odds. With financial privacy and real freedom, you can hire a competing army.
The state will never allow large scale financial privacy because it poses an existential threat to the state.
"Crypto for me, not for thee..."
Bitcoin is a perfect microcosm for the tech sector in what happens when people who don't know how something works and refuse to understand it, try to replace it.
Every aspect of the modern financial system exists for a reason. It evolved over time to deal with problems. Things like reversible transactions are a feature not a bug.
Bitcoin is where all the gold bugs went who lamented the end of the gold standard. Most of these people didn't understand that at no point in history was the US dollar 100% backed by gold (or silver, originally). Never.
What backs the US dollar isn't gold or oil or anythihng else we dig up out of the ground. It's long schlong of the US military.
I've also said that crypt currency exists only because the government hasn't shut it down. All it would take is a policy change from the US government to say banks who have access to the US financial system cannot trade in Bitcoin and it would be over. Yes you could still have wallets (at least until the government starts going after Bitcoin farms, which again it could do) but what would you do with those coins?
Bitcoin is not, never has been and never will be an escape from the perils (some real, many imagined) of fiat currencies.
This article is nonsense.
The guidance doesn't mention anything similar to self custody and the Patriot Act itself has expired: https://en.m.wikipedia.org/wiki/Patriot_Act
It's the worst kind of clickbait, and is actual, real fake news.
"The Patriot Act. Read it."
Hah. Trump is the most corrupt president in US history. Honestly, who didn't think he would corrupt Bitcoin while he was at it?
This is not terribly surprising. Control of the monetary system is a key responsibility of the US federal government; it was always going to be the case that if Bitcoin became a meaningfully-sized part of the financial system the government would impose regulation.
Now we get to see how enforceable it is (and I suspect it's more enforceable than people wanted to assume... They can jail you indefinitely for refusing to divulge a password if the court finds it is not a violation of your Fifth Amendment rights to divulge it. https://xkcd.com/538/).
It will be interesting to see how the pro-Trump crypto bros react to this. Likely by now the whole group has had a chance to invest heavily in various altcoins or whatever will be the beneficiary of government largesse, so these proposed (and difficult to enforce) restrictions are likely intended just to pump those for quick profits.
I'd argue that Bitcoin has been effectively immune to attacks like this by governments for nearly a decade.
The Patriot Act itself was supposed to be temporary and “narrow.” Two decades later it’s the foundation for a financial dragnet that assumes privacy is the problem rather than a basic right.
Just like encryption, once privacy becomes associated with criminality, you end up weakening security for law-abiding users and concentrating power in a few regulated intermediaries. That’s not healthy for innovation, or democracy.