Fighting the War on Digital Cash

At the same time that IJ is fighting for constitutional protections for physical property, we are tackling warrantless government searches in the digital realm as well.  

The Financial Crimes Enforcement Network (FinCEN) oversees the federal government’s financial surveillance program. FinCEN receives vast amounts of information from the traditional banking sector, as banks are required by law to file reports on their customers.  

Cash falls outside that surveillance program, so the government dislikes it. As regular readers of Liberty & Law are aware, the government routinely treats cash as if it were criminal—seizing large amounts of cash and forcing its holders to prove their innocence.  (See here for just one example.) And cryptocurrency, like cash, allows holders to engage in transactions outside the reach of existing reporting laws.  

So late last year, FinCEN proposed a regulation that would subject cryptocurrencies to significant new reporting requirements. The reports would allow the government to match up cryptocurrency wallets with their individual owners, providing a key to track every transaction by those individuals.  

FinCEN is required by law to accept public comments on its proposal, and those comments are the first step toward a legal challenge. IJ took advantage of that opportunity to submit a comment and deliver a warning: FinCEN’s proposal raises serious constitutional concerns. The Fourth Amendment protects your “papers” from unreasonable government searches, and that includes your financial records.  

Whether the government wants to search and seize your physical cash or track your cryptocurrency, the requirement should be the same: Get a warrant.