Crypto Industry Trembles as Section 702 Revival Looms

• The US Senate has passed Section 702. 
• Section 702 will allow the US government to collect everyone’s data without a warrant.
• Ethereum’s founder expressed concerns about Section 702 affecting the crypto industry. 

The US Senate recently authorized Section 702 , a powerful tool that allows the US government to conduct surveillance without a warrant. In a landslide victory, the legislation is now inches away from being renewed, and the crypto industry is trembling in fear of its implications. 

Section 702 Inches From Revival

Section 702 of the Foreign Intelligence Surveillance Act (FISA) is a contentious surveillance legislation that enables the US government to collect, use, and disseminate data held by US companies such as Google, Facebook, and Microsoft, and even telecom providers like ATT, all without the need for a warrant.

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In a 60-34 vote, the bill’s fate now hinges on President Joe Biden’s signature, who is known to champion Section 702 as an asset for national security. Once approved, the legislation will extend for an additional two years.

Originally introduced as a counterterrorism measure, civil liberties activists have long criticized the legislation’s powers, pointing to the government’s ‘incidental’ collection of data on US citizens. 

The legislation poses a serious threat to the decentralization and freedom of not only crypto users but the privacy of individuals worldwide. Ethereum founder Vitalik Buterin recently echoed these concerns, highlighting the risk Section 702 poses to the crypto industry’s ethos of protecting freedom and privacy.

Section 702: A Serious Threat

In addition to the Ethereum founder, the broader crypto community expressed concerns over the FBI and NSA being granted total access to communication, fearing the impact it can have on the industry.

Senator Ron Wyden labeled the recent reauthorization of Section 702 as one of the most terrifying expansions of government surveillance authority in history. Elizabeth Goitein, co-director of the Liberty and National Security Program, labeled it as a ‘shameful moment in the history of the US Congress.’ 

Extrapolating the threats Section 702 could impose, crypto companies could face additional compliance requirements or reporting obligations, potentially leading to heightened KYC and AML measures to identify and report suspicious activity to authorities.

Additionally, Section 702 could also allow regulators to intensify their crackdown on the crypto industry, forcing companies to provide data on wallets, transactions, and more. 

On the Flipside

• According to reports, between 2020 and 2021, the FBI conducted over 250,000 improper searches for information with the help of Section 702. 
• Sen. Warren, who is a known crypto skeptic, voted against the bill but proposed the bill be used specifically for crypto users.

Why This Matters

Section 702 threatens everyone’s fundamental right to privacy. With the US government in charge of labeling things as ‘matters of national security,’ the crypto industry is likely its primary target.

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