Crypto is censored: software code and newsletters in the crosshairs

This is the web version of Fortune’s weekly crypto newsletter, The Big Book.

Crypto is having one of its best weeks of the year as prices rebound and Ethereum nears a major update. But the atmosphere among many is gloomy in the face of a new threat: censorship. Over the past few days, the US government’s anti-crypto policies have led Microsoft-owned GitHub to purge open-source software code files, while another major company has shut down its newsletters for even writing about the crypto in the first place. As respected Bitcoin scholar Muneeb Ali Noted“The Crypto Wars II Begin” – and he’s not wrong.

In the case of the code purges, they came after the US Treasury Department imposed sanctions on a project called Tornado Cash that served as a “mixer” for Ethereum coins, helping users make their blockchain activities virtually untraceable. . The agency pointed out that North Korean hackers and other malicious characters were using Tornado Cash to engage in large-scale money laundering.

The US government’s concern about Tornado Cash is not unfounded. While crypto purists like to portray these services as mere privacy tools, the reality is that mixers’ history shows that they’re used primarily by criminals, and it’s naive to argue otherwise. That said, the government’s response has been alarming.

As Coin Center noted, the response not only targeted people using the service or their wallet addresses, but also targeted the very code it is built on. This is too blunt an approach. Code is simply a piece of technology that can be used for better or for worse, and it’s folly to ban it altogether. As an executive with hardware wallet company Ledger pointed out“We don’t sanction … Interstate 95 because drug dealers drive there or cell towers that carry terrorist calls.”

Coin Center and others also argue that the code is a form of speech and government action could violate the First Amendment. This argument is not new and was raised in the case of the FBI asking Apple to rewrite its code to unlock terrorist iPhones. Legal experts aren’t convinced the “code is talk” argument will work in court, but the Tornado Cash incident shows just how slippery we’re on a slippery slope. The government chooses to not only target people who misuse crypto, but also the building blocks that crypto is built on.

Meanwhile, an even more alarming example of anti-crypto censorship – which received far less attention – came when email service provider Mailchimp abruptly shut down the accounts of popular media sites like Messari and Decrypt (my Former employer). These sites are run by respected journalists and entrepreneurs, and their only sin seems to be providing useful crypto information and research.

Mailchimp has been silent on why it would take such a step, but I have a guess. The company is owned by Intuit, which is the largest provider of tax software, and by necessity works closely with the IRS, which is overseen by, you guessed it, the Treasury Department. It’s not hard to imagine the agency pressuring Intuit executives to adopt its own anti-crypto perspective, and the company’s lawyers in turn deciding to censor crypto newsletters. . Whatever Intuit’s motives, the decision is cowardly and wrong.

Taken together, the purge of GitHub and the shutdown of crypto newsletters reflect a dangerous escalation of the recent US government attack on crypto. As noted by scholar Ali, this sounds like “crypto wars II”; we haven’t seen anything like it since the feds went after crypto a decade ago, and a Justice Department official even tried to sue Bitcoin itself. Ali is also correct that now, more than ever, is the time for the crypto community to put aside its ongoing infighting and unite against the looming threat of censorship.

Jeff John Roberts
[email protected]
@jeffjohnroberts

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MOONSHOT CHILDREN

Want some sun in the crypto winter? Ethereum’s upgrade known as Merge – the biggest crypto tech event in years – is set to unfold successfully in the near future and, most likely, skyrocket ETH.

This is a big deal because the Ethereum crowd has been promising to do this upgrade for years. The merger, formerly known as ETH2.0, will eliminate energy-intensive mining and lay the foundation for Ethereum to become cheaper and more efficient. The project cleared a final major hurdle on Tuesday, completing the so-called Goerli upgrade.

To prepare for this massive change, the developers ran a lot of tests, but this latest test differs from the others: Goerli’s testnet merge is the last – and most important – simulation for Ethereum before the merge happens on the so-called mainnet used by everyone.

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(Some of these stories require a subscription to access them. Thank you for supporting our journalism.)

IF YOU DON’T KNOW, CRYPTO

Crypto bridges have been in the news a lot, mostly for the wrong reasons. Bridges are part of the cryptographic infrastructure which have gained popularity with DeFi and are used to move tokens across different blockchains. They work by creating synthetic versions of popular tokens – examples are “Wrapped Bitcoin” and “wrapped Ethereum” – that behave like a blockchain’s native token. This is important because most blockchains cannot talk to each other, the same way iOS and Android do not interact.

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Harry L. Blanchard