The DeFi Education Fund (DEF), an advocacy group for cryptocurrencies, has requested a US court to take blockchain technology’s unique features into account when assessing the privacy rights of cryptocurrency users under the Fourth Amendment of the US Constitution.
In a move to stop the US government from having unrestricted access to a user’s transaction history on cryptocurrency platforms, DEF filed an amicus brief to the U.S. Court of Appeals for the First Circuit on October 20. The brief supported James Harper’s appeal against the Internal Revenue Service (IRS).
In order to properly balance the investigative capabilities of law enforcement with an individual’s right to financial privacy in the digital age, DEF contended that revisions to the Fourth Amendment are necessary.
“When old precedents meet new technology, courts must ‘assure preservation of that degree of privacy against government that existed when the Fourth Amendment was adopted.”
The United States Constitution’s Fourth Amendment shields citizens from arbitrary government searches and seizures.In support of its claim that the Fourth Amendment attempts to restrict the ability of the US government to acquire data from unaffiliated services such as Coinbase, DEF also cited the Carpenter v. United States decision.The advocacy group went on to say that real-life identities can be linked to their pseudonymous addresses since cryptocurrency transactions can be tracked on open ledgers.In the Coinbase situation, this had an effect on the livelihoods of all 14,355 users. DEF clarified.“The government’s request in this case therefore implicated every user’s every transaction, now and forever, including their ‘familial, political, professional, religious, and sexual associations.”
“It gave the government a “detailed, encyclopedic, and effortlessly compiled” synopsis of the lives of Harper and 14,354 others,” DEF added.According to the lobby group, this level of information is significantly greater than what can be obtained from conventional banking records.
The goal of the DeFi Education Fund is to bring regulatory clarity to the DeFi ecosystem and to educate policymakers on the advantages of decentralized finance.It is anticipated that the ultimate ruling in Harper v. Werfel and Internal Revenue Services would establish a standard for digital privacy protections and law enforcement actions in the US.