The Bank Secrecy Act

Recently BankInfoSecurity e-News reported that "A U.S. District Court in North Carolina last month dismissed its case against $2 billion CommunityOne Bank after the bank agreed to pay $400,000 toward restitution to victims of a third-party ponzi scheme that operated through accounts maintained at the bank."  The bank was being prosecuted under the so-called Bank Secrecy Act.

Orwell warned us that laws would be misnamed in order to make them seem less repressive. One might be led to believe that a law called the "Bank Secrecy Act" would punish banks for violating the confidence of their customers. Not so. Instead what is does is immunize the banks from liability when, and only when, they snitch on their customers, and as in this case, punishes them severely when they fail to do so.

The regulators would have you believe that this is in the interest of resisting the funding of terrorists, or even as in this case, fraud. Again, not so. While it may occasionally do one of those things, it is really in the interest of tax collection.

Privacy is dead. Your bank is not on your side. Now you understand the popularity of a thinly traded and volatile currency like Bitcoin.

The Price of Liberty

I recently received the following from a colleague.

"In the past few weeks some spirited discussions have sprung up amongst crypto spirits.

The consensus seems we can't even agree on how to secure, or implement, our existing Internet crypto architecture, let alone design and deploy one against Sovereign surveillance."


I was prompted to write:

The broader the application of crypto, the less effective but the more threatening to the governing class.

Crypto cannot protect us from the surveillance state.  We need both law and transparency to do that.  However, the pervasive use of crypto increases the state's cost and decreases its efficiency.

The state can read any message that it wants to; it cannot read every message that it wants to.  Every message that it reads, every person that it watches, is at the expense of another that it does not.  However, as the price of technology continues to fall, they will automatically increase their scope.  They will do so without any motive or intent but only because that is what bureaucrats do.  They believe that whatever they can do, they must.

That the effectiveness of crypto is limited in resisting state surveillance, is no reason not to use it.

All that said, I am not very sanguine.  The American people are fearful and their leaders weak.  The idea of a zero-risk society, based upon cheap technology, is too tempting for either to resist.

"The price of Liberty is eternal vigilance." The battle goes on, never fully lost or won.  Never surrender.