Law Decoded: How I learned to stop worrying and love the election, Oct. 23–30

The United States is girding its loins for an election that has cast a pall over a far longer timeframe than we ever should have let it. But then again, what did you expect when so many people spent so much of the past year cut off from their normal lives and circles, growing increasingly dependent on social media as a way of connecting with the outside world? That's not a recipe for sanity, even if it was a race between sane people.

The phenomenon of modern information flow has gotten an enormous amount of attention since the last, similarly godawful election cycle, in many ways forcing regular people to think in the uncomfortably paranoiac manner that cybersecurity pros and blockchain programmers, in particular, are well accustomed to. What is the fear of voter fraud but a double-spend problem? And how can you be sure that every voting machine in America works? And how do I know know that this news report is fact, not fiction or even malicious fabrication?

With America’s collective paranoia and suspicion clicking stomach-churningly upward like the first leg of a creaky roller coaster, it is important to keep a few stabilizing truths in mind. The internet is relatively new, but misinformation has always been with us (what is Gilgamesh but propaganda for an Uruk king?). U.S. presidential elections have always been tense, likely peaking about 160 years ago. And, like, despite flaws, the country actually has an incredibly resilient system.

Today’s Law Decoded is less crypto-focused than I traditionally try to keep it, but it’s important to keep what the devout call “the space” unsiloed. While only the first of the stories under consideration is explicitly tied to the election, the linking thread that I’ll be clumsily trying to unspool before y’all is the question of who has the power, and who can unseat that power justly. Because at its core, that’s what a functional electoral system promises: That the answer to “who will watch the watchers” is us.

Sighting in the scope of Section 230

Titans of tech and, specifically, public online media appeared virtually before Congress to answer for, well, everything.

At the center of what ended up a political browbeating to score, ironically, viral soundbites was Section 230 of the 1996 Communications Decency Act and a barrage of bills seeking to overhaul or revise it.

Senators from both sides of the aisle treated the hearing as an occasion to shift accountability for this election and the one in 2016 onto Facebook, Twitter and Google. Separate but related is the question of whether these companies have illegally accumulated overwhelming power — which is a separate legal issue, on the subject of which my personal opinions are “git ‘em.”

Regarding the challenges to Section 230, however, they do all seem remarkably unaware of the extent of its protections. It has become easy to take potshots at social media giants. Senator Ted Cruz got a bit of circulation for dramatically asking Twitter CEO Jack Dorsey “Who the hell elected you?” There are many ways this pressure could result in new transparency in the content moderation practices of these firms, which have become more critical to a unified sense of what’s going on than anyone could have imagined 24 years ago. But any crackdown on the Section 230 freedom for platforms to moderate user content as they see fit will have major ramifications for a whole galaxy of smaller platforms that couldn’t survive such responsibility for what everyone is saying.

The DoJ doesn’t like the Visa acquisition of Plaid, it seems

Alongside a formal request for more info from consulting giant Bain & Company, the Department of Justice acknowledged that it is investigating Visa’s acquisition of omnipresent fintech firm Plaid as an antitrust issue.

Plaid provides interfunctionality between just about every consumer-facing finance app and online banking system you know and love. They are also the subject of multiple class-action lawsuits accusing them of misusing consumer data. The DoJ’s investigation may well be based on the fear that Visa, knowing already the data of everyone’s spending, is also paying $5 billion to add to that reserve of information about how everyone’s money is moving between systems.

That is, to be fair, speculation. More speculative still is the hope that antitrust law will ultimately keep giant firms like Visa from using the data they snag from their clients to snowball ever further down the mountainside.

But FinCEN wants even more data too

Last Friday, U.S. Anti-Money Laundering watchdog the Financial Crimes Enforcement Network, or FinCEN, and the Federal Reserve sent out a joint request for commentary on a proposed major increase in the information that financial institutions, including crypto firms, need to keep on file.

The famous Travel Rule has for decades required banks to transmit identifying information on the people and accounts sending $3,000 or more. FinCEN and the Fed are looking to reduce that threshold to $250 for international transactions.

Likely, these regulators consider the change reasonable based on the technological shift over the intervening years, which conceivably allows firms to manage exponentially more data than was imaginable back in 1970 when the Bank Secrecy Act passed. But in addition to the fact that $3,000 means a lot less today than then, the proposal neglects technology’s ability to work for the other side of the law. Bastions of juicy financial and personal data are more accessible than ever before to hackers.

Beyond which, these regulators never seem to give much credence to arguments of principle. $250 is a standard consumer transaction. Is that degree of un-privacy really critical to ending money laundering?

Continuing my determination to cling to damned moderacy, I don’t like money laundering. I don’t like the notion of dictators and drug kingpins being able to funnel money away from the citizens living under their reigns to penthouses in Manhattan. But I hardly think that such people are using $250 transactions to get those penthouses.

Further reads

Coin Center’s Jerry Brito and Peter Van Valkenburgh wrote to FinCEN and the Fed arguing against the $250 threshold.

Aditi Kumar and Eric Rosenbach ask what China’s CBDC could do to the primacy of the U.S. dollar for Foreign Affairs.

Lawyers for Manatt, Phelps and Phillips break down what extraterritorial application of U.S. law means for crypto markets.