Why crypto should back the American Data Privacy and Protection Act

As much as the crypto industry is making privacy improvements, more and more people are realizing that increasing access to cryptographic tools can't be the only way to protect real consumer privacy. Federal action is also needed to stop the worst privacy abuses and make them illegal, and a growing crypto industry should support these efforts, even if it means anarchists joining forces with the government.

By every measure, the U.S. is behind when it comes to protecting the privacy of consumers. This gap has made it possible for Big Tech to spy on you and sell your private and sensitive information for money. The adtech industry is huge, and it has made the internet a worse place. One reason we need crypto is to get rid of these middlemen.

What is the American Data Privacy and Protection Act? - PubKGroup

The American Data Privacy and Protection Act (ADPPA), a proposed privacy-protecting bill that is making its way through the U.S. legislative system, would put strong limits on the kinds of information that companies can collect about you online. If it were to pass, it would be the most important new law about the internet in decades and would do a lot to protect civil rights.

Alan Butler, executive director and president of the Electronic Privacy Information Center (EPIC), said in an email, "There are a few small things that we still think can be changed in the bill, but at its core, it would create strong privacy protections for all Americans and block some of the most harmful data collection practices with its strict data minimization requirements (especially for sensitive data categories)."

The bill was first introduced in June, and since then, it has been changed a lot. Several privacy experts now like it, and it's likely to get rare support from both parties (the type of across-the-aisle agreement usually reserved for passing military budgets). Butler said that the upcoming U.S. election could stop these efforts.

Last week, EPIC was one of 50 public interest, consumer advocacy, and civil rights groups that wrote a letter to House of Representatives Speaker Nancy Pelosi (D-Calif.) asking Congress to move on the bill. No crypto firms or projects joined, either because they didn't know about it or because they didn't care. It's too bad about this. Cryptography has a chance to show that it can help shape laws and find another way to protect digital rights.

ADPPA would make it illegal to use sensitive data, like a person's exact location, biometric information, or health information, for targeted advertising. It would also stop companies like Google, Facebook, and Coinbase (COIN) from tracking your web activity over time and across third-party sites. It has strict rules about how data can be collected and "sent" to third parties without your permission.

"This bill would put an end to the shady ways that data brokers do business," Butler said.

Unlike other privacy laws, ADPPA focuses on something called "data minimization" to reduce the amount of information corporations can use. It makes privacy the setting that is always on. Companies would only be able to collect and use data for 17 important reasons, such as logging in and keeping track of fraud.

That's different from other privacy-focused rules, like the GDPR from the European Union, which are "based on consent," as Wired magazine put it. That leads to "an endless stream of annoying privacy pop-ups that most people click "yes" on because it's easier than turning off cookies.

Please Improve the American Data Privacy & Protection Act
When it comes to privacy, crypto has mostly been about making tools or methods to hide your transaction history. The industry has made a big difference in privacy and cryptography research, and it was one of the first places where advanced algorithms like zk-SNARK proofs were used by consumers.

This code-first approach could work well with legislative efforts, or they could stop it from working. This month, for example, the U.S. Treasury Department did something that had never been done before: it approved Tornado Cash, a way to hide your identity on the blockchain. The code is still running, but U.S. users can't get in because of worries about money laundering.

Butler said, "We've been supporting the development of privacy-enhancing technologies for decades, including in the digital currency space, and we're glad to see new tools and systems being used in the Web3 world." "However, we think that right now the most important thing is to make sure that all internet users have more privacy protections."

"That's why we think it's important for Congress to set strong, baseline privacy requirements," he said. "This will encourage more people to use these privacy-enhancing technologies and force data collectors and processors to use more privacy-protecting systems."