, 73 tweets, 44 min read Read on Twitter
#FATF and #EU need to fundamentally rethink their approach to virtual assets/currencies... - mailchi.mp/9c189a620509/f…
A similar line of thinking can be seen at the E-money association, who effectively ask to retract article 7b completely...


And then there is the @ciphertrace response, outlining that checking benificairies and adding information really doesn't make sense...

Crypovalley in Zug also doesn't see R16 of the #FATF working due to wide definitions. @CryptoValleyZug @cryptovalleymap

They propose the following:
And then there is the private sector position during the FATF-engagement sessions with private sector themselves, not finding R16 and 7b workable and proposing: bit.ly/2WC1hzt
Not to forget Washington based Digital Chamber of Commerce that finds article 7b a bad idea... digitalchamber.org/fatf-blog/

2. It Is Inappropriate to include the Broad Scope of Virtual Assets within a Wire Transfer Framework.

And in case you are wondering whether EU investigative authorities would need article 7b, the anser is a clear no....
Then there is also the viewpoint of @chainalysis ....

And not to forget the Global digital Finance Consortium (@globaldigitalfi) made up of 300+ members such as @inside_r3 @circlepay @DLA_Piper @ConsenSys
All outlining the data export element of article 7b should be struck out.


#FATF #notlistening
Many thanks to the Dutch foundation Privacy First @privacyfirst They have just let me know that they oppose the proposed rule and approach taken by governments on this issue.
So I just did a recap on definitions, only to notice that the FATF cannot get their definition of virtual assets straights, but will move forward, ignoring the market feedback on this topic.

Dutch TV/Radio station Radar picking up the news and explaining to the public... radar.avrotros.nl/nieuws/item/pr…
Formal communication and urgent call/letter to Dutch Ministry of Finance, by @privacyfirst and vbnl.org to reconsider FATF-paragraph article 7b and execute a proper impact assessment / inform and discussie with parliament. privacyfirst.eu/focus-areas/fi…
Analysis: overregulation and innovation: regulatory challenges for Fintech in Europe. Presentation during workshop, see slide 16 and onwards. #FATF #amld5 #eu slideshare.net/SimonLelieveld… via @SlideShare
This is for those that really wish to know what the #FATF is all about and where it came from. link.springer.com/article/10.100… … But do note that the article dates from 2018 so it does not contain the most recent FAT-mandate.
@coindesk article on FATF-discussion. Summarises that although #FATF appears to write recommendations its effect will be clear: they have to be enforced... coindesk.com/beyond-kyc-glo…
So, should we really be concerned? Are US regulators and FBI really the overzealous type that go after our data by asking for backdoors/frontdoors in operating systems and message systems?

If you think no, think twice.. and see what happened to Apple...
Well, it's quite unlikely that there will be real harvesting going on once this rule is in place...?

Is it?

FBI raided EU personal data as a standard method by tapping SWIFT data on US servers. Huge databreach and years of article 29 discussions in EU. ec.europa.eu/justice/articl…
Well, the FATF and G20 are all democracies that we can expect to guard human rights and personal data properly. Right?

Human right watch report:
Freedom house report and democracy index:

Democracy is in decline.
States go rogue.
Well, all this privacy stuff. I really have nothing to hide. What's the harm if some data is overflowing to other players in the value chain. I couldn't care less.


Look ahead at the future capabilities of technology and its possible use in state hands... @freedomhouse
So, @digitalcourage @OpenRightsGroup @privacyint @edri would you care to support this @privacyfirst initiative and bring it to the attention of EU officials?

States in FATF-context are turning blockchains into monitoring tools

All support is welcome!
This article by @AaronvanW raised the international awareness among virtual currency players in an early stage: published in the week after the disappointing Vienna meeting of the #FATF.

Then, for those interested in anti terrorist information systems and the procedures and issues that one comes across there is this `RUSI paper:
'An EU Terrorist Finance Tracking System' by @MaraWesConsult

Evaluation of Dutch Counter Terrorist Policies by @MaraWesConsult and @deGoede9 reported via WODC outlines that impacts to society and privacy are often overlooked (or 'underexposed' ) and not properly taken into account.
Same evaluation by @MaraWesConsult and @deGoede9 reported via WODC mentions dangers of public-private info sharing platforms:
'It is important to have more public discussion about the legitimacy, efficiency and privacy protection of these innovative forms of cooperation'
The #IOSCO, international security regulators, find it too early to start formulating requirements and such for crypto assets. They explain how to apply existing regulatory frameworks and take a considered hands-off approach. #FATF could learn from this.
Published on Friday: this @CryptocastNL podcast where I explain how the FATF rule, that obliges companies to include datamonitoring and export tools in blockchains, will rip the consent-mechanism out of the hands of EU citizens and works as kryptonite against all privacy-laws.
Meanwhile @josephweinberg, OECD-advisor, explains exactly the same in a podcast with @APompliano .
'If you go to 45 minutes into this podcast, I say that the largest threat to the crypto space today is 7b.'
He fears that US momentum in FATF is too big.

Report by Financial Stability Board @FinStbBoard has a status of regulatory discussions on crypto. fsb.org/wp-content/upl… Outlines moving technology and different status of virtual assets per jurisdiction. States that FATF recommendation 15 and article 7b is up for approval.
Niet onbelangrijk. Nederland accepteerde in 2017, als lid van de Mensenrechtenraad, expliciet de onderstaande aanbeveling 131.121 van Spanje over het niet onnodig doen aan massa-surveillance voor onschuldigen. Aannemen FATF-regel is strijdig daarmee. upr-info.org/sites/default/…
On 18 December, the United Nations General Assembly adopted by consensus Resolution A/RES/68/167, Right to privacy in digital age. un.org/ga/search/view…

Arbitrary surveillance is a violation of the right to privacy.
Reaffirming terrorist measures must respect human rights.
Forr those wondering why US players are so silent about #FATF 7b rule. Their home supervisors have already sneaked a similar rule in place without enforcing it. Now they threaten the players to fine them retrospectively for not living up to it if they publicly object. #powerplay
Latest information: Carolin Kaiser wrote a dissertation on Privacy and Identity Issues for Financial Transactions (2018). Very insightful on historic and legal background. Questions whether AMLD structure in EU is consistent with human right to privacy.

Just as the data retention by mobile operators is limited by Court of Justice, there is no reason to assume that all of a sudden similar customer information retention rules under the AMLD or FATF standards would hold in Court.

Analysis by C. Kaiser:
Here is my request to MPs in the Netherlands... can you take up the issue of reconciling the Dutch obligation to protect civil rights and not retain personal data of innocent people for law enforcement, versus the FATF-plans.

And here is the video-interview of @cafeweltschmerz (in Dutch) where Ispeak about the FATF, its decision making process, the article7b and the importance of weighing the human right to privacy versus the desire to sturn blockchain into a surveillance tool.
Latest news in the same area. German police wants access to home devices for tracking and tracing purposes.

#FATF must read. Execellent dissertation by @MaraWesConsult that describes the playbook of the FATF, the process of depolitisation, and how we all were sucked into irrelevant technical discussion. Let's not repeat the same process for virtual assets. pure.uva.nl/ws/files/17378…
If we want to understand the misstakes that we are about to make with the #FATF article7b discussion, we must know what happened in the similar discussion when introducing it in the banking sector. Next up further excerpts from @MaraWesConsult
@naval did you see this fatf discussion and can I help educate your audience and us politicians on the relevance of taking the human rights into account ? This is the kryptonite against privacy laws. Need to act before June 16 btw 😀
Resources in #fatf and podcast can be found here...Episode 177: FATF Creating Gold Standards and Paper Realities? aroundthecoin.com/podcast/episod… via @aroundthecoin
Todays explanation by Petra Hielkema at #BIC19 that article7b FATF rule would not be so harmful in the end. There is a secret explanatory document outlining this: so no reason to worry.

She stated firmly: laws apply to cool technology.
And I agreed: as they do to regulators.
I want to add. I am not claiming that DNB would in any way violate the law now. I merely state my expectation that civil servants act in compliance with human right agreements that their governments agreed to.

This dissertation shows the difficulties:
Perhaps the international regulators may not be aware that the cryptocurrency space has matured to a level where players already applies KYC/AML meausures in order to keep their bank accounts. The notion that they all seek to avoid this regulation is simplistic.
A different angle to the FATF debate would be to look at what surveillance measures are already in place. And then wonder: is there really need for more?
G20-regulators/central bankers including @WBHoekstra and @klaasknot are paying more attention to arguments on terrorism prevention than human rights. They better listen to Phil Zimmerman and his views on states and privacy.

So this blog post is for them: moneyandpayments.simonl.org/2019/06/zimmer…
Check out my latest article: G-20 and FATF should not infringe on the human right to privacy by prescribing mass surveillance for virtual assets ! linkedin.com/pulse/g-20-fat… via @LinkedIn #FATF @UNHumanRights
1. @privacyfirst and vbnl.org warn @wbhoekstra (Dutch Minister) on issues with #FATF virtual asset rule: letter of 23 May
2. Ministry promises fast response
3. No response
4, @WBHoekstra moves on to welcome FATF-standards.
@mrtbollen @MahirAlkaya @BasEickhout
All the G20 preparatory documents are open to the public.
Except one.... the FATF Presidents letter to the G20.

So the FATF consultation with the private sector on virtual assets is secret
It's communications with the G20 Ministers are secret.
Proposed rule/guidance is secret.
Another goodie in the @FT on FATF. Private sector input into the UK mutual evaluation was ignored and criticism deleted on request of UK government. Some governance at work.

NGOs say governments have excessive sway over dirty-money reports - on.ft.com/2XDh2GG via @FT
Now listen carefully, as I shall say this only once.

In US (Supreme Court-Carpenter) and in EU (Court of Justice-Tele2) courts ruled that there are limits to data retention of innocent people's data for telecom.

The #FATF-virtual assets rule is unconstitutional

At the blockchain innovation: this clip where I outline that the FATF-rule for virtual assets (article 7b) is very inneffective, disproportional and a violation of human rights. Please RT
@CaitlinLong_ @dgwbirch @AaronvanW @MarcHochstein @lexhoogduin
Nice visualisation here of the issue.

Dutch journalist @krijnsoeteman uncovered that Dutch Ministry of Finance left an urgent letter/call to action on #privacy issues with respect to #FATF -rule, unanswered. Now it's up to parliament that will discuss this afternoon. @MahirAlkaya @KeesVee

Latest news: an answer has arrived this morning and is forthcoming.
On june 12, the Dutch parliament briefly discussed the FATF discussion for crypto. See the link for a brief summary, outlining that our Ministry of Finance did not address human rights issues at all and made the stuff technical.
My comments on the letter of Ministry of Finance about the issue are listed in this article. ksoeteman.nl/2019/06/groots… Briefly: this ignores the policital issue of balancing human rights and law enforcements. A missed opportunity to have a relevant debate on privacy in digital age
A relevant development is of course also the Facebook coin as reported by Wall Street Journal. wsj.com/articles/faceb… I think the #FATF completely overlooked the possibility that bigtech would apply crypto. So article 7b of FATF turns into a free privacy pass for Facebook!
Having said all that, the FATF week is forthcoming and we will see a lot information and pressers and all that. Outlining the good they do for the world, but.... it does make we wonder what #FATF really stands for.
To wrap up the thread on this topic, I leave the FATF with an open letter so that they can reflect on what they think FATF should stand for.

PS 1. Someone asked me about my own input to the consultation of the FATF. This is technical but see below. I outline that by applying the domestic wire transfer regime for international virtual asset transfers, it is possible to respect relevant privacy rules that prevail.
PS 2. Here is an excellent article on medium by @krijnsoeteman summarizing the whole discussion and outlining how a small and seemingly boring little line in government documentation may turn out to represent a major privacy infringement. @UNHCR_Nederland
PS 3. Saving the thread now.

Hello, @threadreaderapp
Please #unroll this thread so I can save it for posterity.
Ps 4. An industry group is doing a summit during the G20. Not to protest but to see how virtual assets recs can be made to work. This leads FATF to conclude this is the right -doable- path. Industry can do it... #stillabadidea
PS 5. The FAT rules have been adopted and it looks like it's going to be a hammering forward exercise. The only thing we can hope is that the alignment with data protection rules will lead to something:
PS 6. Link to FATF Guidance. A bunch of reading material. With interesting discrepancies. And the good statement that it is not-binding and should align with privacy rules.

Still the accompanying materials suggest that it is binding. #FATF, which is it?

PS 7. Having said that, reality will be that the US companies will comply with FATF rules and thus market discipline kicks in for non-US jurisdictions. Even if countries would not implement FATF-article 7b, if you want to remain in the game, you will comply for commercial reasons
PS 8. The whole argument that the travel rule is applied to even the level playing field is nonsense. Whereas domestic wire transfers don't require full name transmission, the FATF states that ALL transfers must be treated as international ones.

Opposite of my suggestion.
PS 9. So the playbook to export onerous compliance requirements is:
1. Put in place locally but don't enforce.
2. Seek international acceptance and allow they are not binding.
3. Avoid open discussions.
4. Enforce locally: export it via big market players on 'legitimate' basis.
PS10. It would be interesting to see if, after the FATF-thing, in crypto the same thing now will happen as in banking. EU platforms further kicking out US customers/residents, and requesting their customer to use their own wallets to connect to US.
PS 11. Here is the interview with bitcoin magazin/network podcast. Done in the same (historic) week that the Libra initiative was announced.

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