Opinion by: Lizandro Pieper, Research Director at DeFi Education Fund
The “right to privacy” is often found in the crosshairs of critics who deem privacy only necessary for criminal activity, as opposed to a right for ordinary people who wish to be left out of harm’s way and to live with dignity.
There are those in Washington who believe that collecting and storing millions of Americans’ personal information is a good thing for society, and that evolving financial technologies, such as decentralized finance (DeFi), should adopt such information collection measures or be banned.
This ignores the reality of the dangers of creating honeypots of people’s sensitive data. It is no mystifying revelation for everyday Americans that information is the most valuable commodity in the 21st Century. It must be protected or otherwise risk being exploited at their expense.
Demystifying DeFi
Ipsos and the DeFi Education Fund recently conducted a research project called “Demystifying DeFi,” consisting of qualitative and quantitative data on various matters about the current financial system and DeFi, and among the multiple findings was a deep concern for the loss of privacy.
Specifically, Americans felt that personal financial data is unsafe and financial privacy is an illusion. Over half (54%) of Americans surveyed expressed the feeling that the current financial system does not adequately protect their personal information, and (56%) that changes to the current financial system are needed to give people more control over their personal data. Less than a third of Americans believe the US financial system is secure today.
Data breaches and disasters
This is unsurprising given the endless data leakages and breaches of sensitive personal information in recent years. Let us not forget Equifax’s data breach in 2017, where 150 million Americans — nearly half of the country — had their names, home addresses, social security numbers and even driver’s license numbers compromised.
Many data breaches have occurred since then — almost regularly, with 3,158 data compromises in 2024 alone — and are advantageous to criminals who use stolen identities to control financial accounts, conduct fraudulent transactions or drain funds, which is why those surveyed see protection of their financial data as a fundamental right and prerequisite for trusting any financial system, citing constant news of data breaches and the feeling that their data is already exposed and out of their hands.
This is not the only anxiety related to the financial system among Americans. In one interview, a Queens, New York resident expressed frustration that the financial system offers no real privacy and that he can’t make large transactions without feeling like he’s being watched or will have to explain his actions.
Related: Vitalik slams EU’s Chat Control: ‘We all deserve privacy and security’
Another New Yorker shared similar frustration, noting the lack of freedom from being tracked for one’s every move, and the unwarranted accusations of suspicious activity that follow.
The surveillance mandate
Undoubtedly, our financial system and the surveillance mandate have created an environment where we are essentially guilty until proven innocent, or at least, we feel that way constantly.
The watchful eye of our financial institutions and regulators has eroded our financial autonomy and sense of dignity while failing to meet national security objectives and jeopardizing our safety and freedom to live as we choose.
Considering all of this, among respondents interested in DeFi, over half prioritized having complete personal control over their personal and financial data security
The personal autonomy derived from privacy is central to DeFi’s existence, rooted back to the cryptographers of the early 1990s, when the world was first introduced to the information age and the right to privacy was quickly eroded by developing technologies.
Among them was Phil Zimmermann, who recognized: “Advances in technology will not permit the maintenance of the status quo, as far as privacy is concerned. The status quo is unstable.”
In that regard, protections for those developing the technology that puts ownership of one’s personal and financial data back into our own hands are paramount.
Surveillance technology will continue to evolve, and malicious actors will continue to steal the information it leaks, but we do not have to stand by and wait for such outcomes. DeFi presents obvious solutions to these problems, and Americans have a strong desire for such remedies to prevail. Our elected officials must act in the interest of the American people.
Time for legislative action
This means Congress must pass legislation protecting software developers from subjugation to ill-fitting and burdensome registration requirements and wrongful prosecutions, and for the Financial Crime Enforcement Network (FinCEN) to drop its “mixer rule.”
Software developers should be able to continue building privacy-preserving technologies, and existing information collection regimes should be modernized so they no longer harm the very people the law is intended to protect.
If the United States wishes to be the beacon of freedom it was declared to be, it must work for the people in ever-evolving ways and uphold Americans’ natural right to privacy.
Opinion by: Lizandro Pieper, Research Director at DeFi Education Fund.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Coinpectra.