Sunday, June 16, 2019

Texas Newly Drafted Law Threatens Crypto Users Privacy

A newly drafted law in the city of Texas threatens the privacy of cryptocurrency users. Bill HB 4371, which is sponsored by a Republican Senator, Phil Stephenson aims at banning the usage of cryptocurrency between two unidentified parties.

Bill To Enforce User Identifications

The Bill, HB 4371, aims at obliteration of anonymity in digital currency usage. This came with a suggestion for the government of Texas to only accommodate what Stephenson described as verified identity currency. Also, the bill recognizes blockchain technology as a tool that enables users to create financial aliases.

Drew Hinkes, Chief Legal Officer, and Co-Founder at Athena Blockchain noted this in a Tweet that,

“Texas HB 4371 would require prior verification of #identity for any transaction paid for via #digital currency, only allow the state to operate with a verified identity digital currency, defined as one where identity if sender is known prior to transaction. 1/3 To my knowledge.”

The implementation of the drafted bill would make a digital currency transaction illegal if the involved parties are unknown, thereby introducing transparency like the current financial system. In essence, this would aid institutional adoption, as it will involve, state departments of banking, securities board, and others to provide tools to users to distinguish between verified and unverified crypto users.

Prominent People Disagrees With New Law

Cryptocurrency lawyer, and Coin Center head of research, Peter van Valkenburgh has been at the forefront of the criticising the recently proposed bill. He made it known in a tweet that enforcing identification of users when it comes to cryptocurrency payments maybe okay constitutionally but makes little sense as far as cryptocurrencies are concerned. He further noted that “a person wants to pay you, you ask: are you you? Person: yes. Boom payment can happen.”

Also, Valkenburgh further said that the law is oddly drafted and that’s not even how digital currencies work.

Meanwhile, the implementation would make Texas the distinctive state with odd crypto law. Other states such as Wyoming have adopted friendly crypto regulations in recent time. Further, the United States cannot afford to occupy a front runner role in crypto adoption, considering some countries are ahead of the U.S. in adoption.

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