Why is the SEC Concerned about Privacy now?

**Peter Van Valkenburgh** (0:00)
Coin Center's main day-to-day work, our number one mission priority, is always to defend the developers of open blockchain networks from inappropriate regulations or unjust prosecutions. I think it's becoming more and more self-evident that a transparent layer one is not a neutral layer one, not in the long run. Ultimately, transparency will destroy neutrality. And this is not me saying that we should be building things that enable money laundering. It's me saying, no, we should build global neutral communications networks for things like underlying settlement. This was true of Swift in the 80s. It was neutral. If we're going to build a better system, we should be building more like Swift used to be and less like what Swift's becoming, where it's just a fully mediated underlying settlement ledger even for messages for settling transactions, let alone transactions themselves.

**Sebastian** (0:55)
We're here at DevConnect and today we're speaking with Peter live and in color. This is, it's nice to see you here.

**Peter Van Valkenburgh** (1:05)
I should have worn a more expressive outfit.

**Sebastian** (1:07)
I think we're all a little bit drab, but I think it's kind of like the background makes up for it. So it's a little for everyone who's listening to this, it's a little trippy, but trippy and kind of-

**Peter Van Valkenburgh** (1:20)
It's a little creepy AI's flaw. There's probably AI, there's some tech in there that's definitely Chachi Petey's idea of words.

**Sebastian** (1:30)
How has Buenos Aires treated you so far?

**Peter Van Valkenburgh** (1:33)
It's been great. I think one of the, and it's become sort of widely discussed, one of the interesting things about DevCon this year or DevCon Act or whatever, the big Ethereum conference this year is that privacy is actually being discussed more fully. And you know, Coin Center, my organization has been trying to focus people's attention on the need for financial privacy and the need to protect the builders of financial privacy for over 11 years now. And sometimes there's periods in that history where you're like, hey, like Zcash or things like that. And sometimes there's periods where it's like, okay, everything's going to be done with stable coins on chain, and we'll have full transparency into all transactions. And that's what will tell law enforcement why they don't have to worry about the technology, because it's a penopticon. And now we're kind of swinging back to like, oh, well, actually, maybe that would be bad, not just for the criminals. We want it to be bad for the criminals, but actually bad for all legitimate uses of the technology as well, because who wants to use a global financial system where every time you buy a can of Coke, a billboard pops up with your name is like, Peter just bought a can of Coke, everyone. It's bad. This episode is brought to you by Gnosis, building the open Internet one block at a time. Gnosis was founded in 2015, and it's grown from one of Ethereum's earliest projects into a powerful ecosystem for open user-owned finance. Gnosis is also the team behind products that had become core to my business and that of so many others, like Safe and CowSwap. At the center is Gnosis Chain. It's a low fee layer one with zero downtime in seven years, and is secured by over 300,000 validators. It's the foundation for real-world financial applications like Gnosis Pay and Circles. All of this is governed by Gnosis DAO, a community-run organization where anyone with a GNO token can vote on updates, fund new projects, and even run a validator from home. So if you're building in Web3 or you're just curious about what financial freedom can look like, start exploring at gnosis.io. How much of that do you think the interest in privacy is driven by market movements or is it like the demand for privacy that's driving markets or is it the markets that's driving privacy? Yeah, it's probably the markets driving privacy. Because as much as I would like to, as an advocate, as a lawyer, as a person who stands up for normatively what we should have, you can be like, build privacy and people are like, why would I build something no one's going to use?
The thing that infuriates me more than anything else at all of these conferences, I meet all these great people and usually they're like, how can we stay in touch after we leave this conference? They're like, do you have Telegram? I say to them, why would I use Telegram? The strange half-baked, not encrypted for group chats and vaguely encrypted for individual chats platform where they rolled their own hash functions, that's a disaster. We've had Signal for decades now. What's wrong with you? Why aren't you using Signal?