"The Freedom to Build (and what should we build?)" by Peter Van Valkenburg / EC CONGRESS II, 2025

[applause] Hi everyone. Thank you. Um, so my organization's Coin Center. Show hands if you've heard of Coin Center and our work. That makes me very happy.

Um, our mission, uh, we're based in Washington DC, and our mission is to defend the rights of individuals to build and use free and open cryptocurrency networks. The right to write and publish code, to read it, to run it, the right to assemble into peer-to-peer networks, and the right to do all of that privately. So to me, these are sort of natural cipher punk ideals. They are the strange brew of folks like Richard Stallman, folks like um California hippies of the 70s, California software engineers of the '9s, but also the American frontier, English natural rights theorists, and I think hopefully now also the ideals of a global community of builders and activists who are sick of big banks, sick of big tech, and wary of state surveillance and control and I hope the larger Ethereum community. And so in line with that cipher punk ethos, Coin Center doesn't fight for the government to give us privacy.

We don't want the government to give us privacy. We don't want it to give us a legal right to privacy either, not an enforcable one. Coin Center fights for the government to leave us alone, to give us the space and the freedom to be able to build and use systems that protect our privacy. I don't want GDPR. I don't want GDPR.

I want the freedom to use strong encryption and the space to build systems that will let me rather than the government keep my data safe from being exploited by states and corporations. So I have just two things to say to this Congress and this speech runs short uh you might be glad to know. So let me just go through them. One I want to update you on how our work is going in Washington DC visa v American policy towards these technologies and their builders because that is a big threat not just to Americans but to people globally and our ability to use these tools. And two, I can share my opinion as to what we should be building with that freedom if we can keep it, if we can secure it.

So this year we won a major victory. Coin Center challenged the American sanctions against the tornado cash smart contracts on the Ethereum blockchain. Our legal theories were proven correct in court and the US government conceded defeat there and delisted the tornado cash pools. So a ban a US ban on people's ability to use privacy tech was defeated because of our work. But of course this year has also seen defeats.

the developers of those tools, Roman Storm especially, um was found guilty to of conspiracy to do unlicensed money transmission in the Southern District of New York. The Samurai Wallet developers, a Bitcoin privacy wallet, plead guilty to the same charge this past year. And so we struck a victory in allowing people to use the tool and telling the US government they can't just use sanctions to ban Americans from using these technologies. But we did not win. We have not yet won in the defense of the people who are building these non-custodial tools for software and should not need to face a licensing requirement or felony liability for building these tools.

So to fight back, Coin Center is supporting another developer. His name is Michael Llewellyn. He lives in Fort Worth, Texas. and he's brought a case against the DOJ to challenge their interpretation of those money transmission licensing laws that Roman Storm has been wrongly found guilty of. Michael has developed a privacy preserving protocol for crowdfunding called Feros, like a lighthouse, and he wants the courts to tell him he won't be jailed for publishing it.

But the DOJ, even under Trump's pro- crypto America, the DOJ is still aggressively calling for his case to be dismissed because according to them, Michael doesn't face a credible threat of enforcement for publishing his software. So what of that credible threat? Is there a credible threat to American privacy developers today? Earlier this year, DOJ officials published memos and they gave speeches saying that they would stop prosecuting non-custodial developers for unlicensed money transmission. Great.

And yet, the administration didn't drop the ongoing prosecutions that ended in the Tornado Cash and Samurai Wallet developers found guilty for unlicensed money transmission. All this even though all of those developers, none of those developers ever had control over people's funds. the definition of being a money transmitter. So, it seems to me that there is still a very credible threat of enforcement for people who are developing privacy tools. Briefly, and what about Congress?

Is the American Legislature going to fix this mess? Maybe. I'm actually optimistic here. For the first time in a long time, a bill called the Blockchain Regulatory Certainty Act, which creates a safe harbor from exactly these prosecutions, has been passed by half of our Congress, the House of Representatives. And we're tearing we're teeing it up in the Senate.

If we can get the Senate to agree in the new market structure uh negotiations that are happening there, we could actually get a binding legislative safe harbor for developers like Roman Storm. So stay tuned. And one of the laws that Congress actually passed this year, one that I'll talk about briefly because I'm very proud of Coin Center's work on this and because it is of fundamental importance, is the revocation of the IRS, our tax authorities DeFi broker rule. So had that broker rule gone forward, it would have required all sorts of decentralized app developers to learn the intimate details about the users of their software, including their taxable capital gains to report it to government. I didn't hear Mr.

Stallman's talk earlier, but I I'm not sure Mr. Stallman and I agree on this one. I think it's I think it's not the government's business to tell software developers to surveil their users even in regards to their taxation, even in regards to their tax liabilities. But maybe Richard installment and I just can't see eye to eye there. I don't know.

The last legislative effort I want to update this Congress on is also the segue to my second topic. What should we be building with this freedom? So this year the US passed a law regulating stable coin issuers called the Genius Act. It's generally a good law that enables trusted companies to issue dollarback stable coins with federal oversight for things like reserves. But it all got me thinking.

We don't talk about privacy in stable coins enough. We don't talk about the realities of trusted stable coin issuers and what that does to our policy goals of freedom and privacy. So last month I was in Nashville at a summit organized by the Human Rights Foundation. I met activists and freedom fighters from Iran, Venezuela, Palestine, Thailand, Nepal. The list goes on.

Many talked about how they used Bitcoin in their work to support their people on the ground in the countries where they were engaged in advocacy. My question is, can stable coins do that? Maybe, though not if they're from a trusted issuer who freezes them because of a geob block, a sanction, or pressure from the US government. I also met some folks who've been working on federated ecash systems for Bitcoin and Shamian ecash protocols in general. And the thing is, if you're going to trust an issuer anyway, there's no real reason to use a blockchain for that stable coin.

And if you don't use a blockchain for that stable coin, you can do peer-to-p peer cash as Sham originally designed it and do it without the technical expense of a blockchain and without the privacy in issues inherent in a fully public and transparent ledger. A lot of this stable coin tech, at least the way it's rolling out to the public, is bad for privacy, is bad for liberty. And all that got me thinking about stable coins and central bank digital currencies because everyone even people in Washington DC seem to think that CBDC's are a dangerous idea that with CBDC's people uh it will magnify the power of corrupt nation states and allow for mass surveillance of the population. But the thing is, unless we start seeing stable coins issued on truly private blockchains or simply off-chain via ecash systems, the current stablecoin model of recording all user payment transactions on a public blockchain is a disaster of equal proportions to central bank digital currencies. They are the same.

It's actually worse from a privacy perspective than the traditional banking system and exactly as bad as liberty for CBDC's. It also has disastrous consequences for the long-term neutrality of the base layer. But that's a topic I'll leave to tomorrow when I speak at DevConnect uh tomorrow at 6:30 if you're going to Dev Connect. So, finally, I want to leave you with one final thought. The Genius Act also triggered something else.

Um, the law requires Treasury to um have a notice and comment process about how APIs, AI, digital identity, and blockchains could improve anti-moneylaundering efforts at stable coin issuers while reducing harm to legitimate privacy interests. So, Coin Center, as it happens, started thinking about these exact questions last winter, and our work recently culminated in a report, Tear Down This Wall Garden: American Values and Digital Identity. I co-authored this with Ian Meyers, co-inventor of the Zcash Protocol. The report basically says that AML is garbage. That's anti-moneylaundering.

And the UN and FATIF agree. They say that you only get sub 1% of elicit funds ever seized or frozen because of AML. The report goes on to describe how new technologies pioneered in our space, the real ciphers punk space, zero knowledge proofs, verifiable credentials, open blockchain networks, can actually do far better in deterring illicit finance while still allowing users of these technologies to protect their privacy. And so we also started thinking about the need for an initiative dedicated to rapidly identifying potential use cases and specifying technical models for privacy preserving alternatives to KYC, pitching regulators, lobbying people in Congress to identify these alternative methods to KYC as acceptable alternatives to the requirements under the financial surveillance laws, the Bank Secrecy Act. And that project is all about American identity as an idea.

So I could think of no better name also for the lobbying purposes than the John Hancock project. So John Hancock gave us the most famous signature in American history. It's so renowned it became an idiom. Give me your John Hancock. As with a lot of avatars from older history, we've forgotten how wild the old world was.

Hancock was the first to sign the Declaration of Independence and he did it very bigly as you can see and the Declaration we have to remember was essentially a death warrant for the signers if the revolution had been lost. It was treason as Ben Franklin famously quipped at the time, "Gentlemen, we must all hang together or assuredly we will all hang separately." And apocryphily it might be a myth. John Hancock apparently after signing his big signature said, "There, King George can read it without his spectacles. May he raise the reward on my head."

More seriously, the notion that by pledging oneself to a cause, one can achieve real political change for good became core to the American experience. It was formerly protected in our Bill of Rights. Not just a right to speak, but a right to petition the government for redress of grievances. And I think it's kind of sad that for all our online advocacy, our politicking, there's not really a good way for most people to sign their name to something they believe in online digitally, apart from having Meta or X.com do it for you.

Quickly, here are three more sig three more signatures. Anyone recognize some of them? That first one there on the the right of John Hancock is Sojourer Truth. Truth spoke passionately and eloquently about abolition and about women's rights, an escaped slave who also had to find and free her own children. Her story rallied thousands to the cause of abolition.

Truth was not born with that name. She chose it. Her biographers said that she would say in speeches, "The scriptures say, for we are strangers before thee, and sojourers as were all our fathers. Our days on the earth are as a shadow. I asked the Lord for a name, and he gave me sojourer.

So I must go up and down the land, showing the people their sins, and being a sign unto them. When I was a slave, I bore the names of my masters, but I am no longer theirs. I serve the Lord now and the Lord is truth. So I took truth for my name that all might know whom I serve. As we think about new identity technology, I think about Sjourer Truth.

We need tools that allow those who've been overlooked and outright oppressed to make their own identity online to tell stories others don't want told. Truth's signature is an X because she was denied an education and she struggled with writing. Nonetheless, her ex was a valid signature. Another lesson. We should be able to commit to things without a full name.

An X might be all that is needed. That next signature in red is Arthur Miller, one of the greatest American playwrights of all time. Does anyone know what Arthur Miller is famous for not doing? Arthur Miller did not name names. He was dragged before the House on American Activities Commission.

He was threatened with blacklisting in Hollywood with contempt charges and other indignities. But he refused to put his name to a list of American Communist Party members. In fact, rather than rat people out, he wrote a whole play about it, about the Salem witch trials called The Crucible. Here's a quote from the lead character, John Proctctor. Because it is my name.

Because I cannot have another in my life. Because I lie and I sign myself to lies. Because I'm not worth the dust on the feet of them that hang. How may I live without my name? I've given you my soul.

Leave me my name. As we think about new identity technologies, I think about Arthur Miller and John Proctor, about how names and signatures matter as much in one's ability to sign something as in one's refusal to sign something that they don't believe in. I think about Giles Corey in Salem, about how badly the corrupt town government wanted him to confess to seeing witchcraft he didn't see. that they tied him to the ground and piled stones on his chest and that when they asked him again to confess, he spit at them and said, "More weight." And that he died that way.

Finally, everyone should know the last signature, Satoshi, alongside a proofof work calculation. and perhaps the first example of a truly indelible and unforgeable digital signature made in protest of a broken financial system that had to base the currency in stolen our agency, our ability to transact peer-to-peer. I think about these signatures and I realize we have so much work left to do just to reclaim the kind of agency and freedom these signers found in their greatest moments in the physical world. We don't have that in the digital world. We need to take that power, democratize it so that every American born today can commit their name to a cause, reinvent themselves despite discrimination, refuse to sign their name to lies, and leave a record that will outlast tyranny.

Bitcoin gave us back our ability to physically possess something while we are online, a precondition of having enforcable property rights. Ethereum extended that power and made it modular, allowing us to commit ourselves to actions, a precondition of having enforcable contract rights. But we still lack an even more fundamental right. One that was taken gr taken for granted by the American founding fathers and the natural rights theorists because it was so self-evident. The right to an identity.

The ability to show someone who you are, give them good cause to believe you. or in the alternative, hide your identity or refuse to commit your name to things you don't support. Today, your identity is not your own. Banks must know all things about you in order to allow you to transact, but they independently verify your off-chain records, surveil you, get hacked, report your activities to corrupt states. Social media sites purport to represent you online, but they can and do reshape your identity without your consent by adjusting and censoring the online persona you put into the world and the personas presented to you, your friends, your neighbors, your fellow citizens.

Today, none of us are actually us when we are online. We are Peter Instagram and Nirageex.com. I no longer want to bear the name of my big tech minders. Help me retake my name.

If you're inspired by these ideals, join me in building the John Hancock Project to fix digital identity, find privacy preserving alternatives to KYC, and support Coin Center's work to defend the technologies of freedom and privacy. Thank you so much. [applause]

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