Why‌ ‌Privacy‌ ‌Matters‌ ‌in‌ ‌DeFi:‌ ‌U.K.‌ ‌Government‌ ‌Issues‌ ‌$100k‌ ‌RFP‌ ‌for‌ ‌Blockchain‌ ‌Surveillance‌ ‌Software‌

Her Majesty’s Revenue and Customs (HMRC) published a request for proposals (RFP) for the development of tools for conducting chain analysis.

As governments and powerful organizations across the globe are come to recognize the revolutionary implications of decentralized technologies, efforts to preserve power and maintain control over their constituents and jurisdictions should be expected.

Such efforts, however, run contrary to the principles of DeFi and draw a line in the sand between principled DeFi companies and startups simply looking to capitalize on the development of the latest technologies.

Read on to learn more about the RFP itself, the evolution of blockchain surveillance, and why privacy remains a constant struggle.

About the RFP

HMRC is the department of the U.K. government responsible for tax collection, paying certain forms of state-sponsored support, and administering regulations like the minimum wage.

The RFP calls for the:

“Provision of a tool that will support intelligence gathering methods to identify and cluster Cryptoasset transactions into linked transactions and identify those linked to Cryptoasset service providers.”

In addition to identifying citizens suspected of not paying taxes on their digital assets, such technology may be used to coordinate blacklisting and engage in other forms of financial surveillance.

The year-long contract extends from February 2020 to 2021 with a deadline for response on January 27. Authorities are open to proposals without regard to geographic location.

Blockchain Surveillance Evolves

The development of tools for chain analysis raises obvious questions about what, exactly, those tools will be used for?

Few would argue against combating the international distribution of dangerous narcotics like fentanyl, however, issues like tax evasion come with more politically-charged nuance.

Tax evasion among the wealthy is no longer an open secret thanks to the release of documents like the Panama Papers, so why shouldn’t citizens question their government’s lack of enforcement among the wealthy instead of targeting the poor and middle class?

The Privacy Problem

Privacy often gets dismissed by those claiming they have “nothing to hide,” however, privacy is recognized as a fundamental human right and represents the last line of defense against tyrannical authority.

The history of privacy-enabling technologies can be thought of like a pendulum swinging between security and accessibility: popular technologies tend to minimize security features to promote accessibility — until security breaches force the pendulum to swing in the other direction.

Whether you have anything to hide or not, privacy matters because it helps maintain a balance between “We the People” and the authorities we recognize.

Governments have plenty of legitimate reasons to conduct surveillance, just as individuals have plenty of legitimate reasons to enjoy their privacy, but each must be accountable to the other.

Bringing Privacy to DeFi

As the development of DeFi threatens traditional authorities, the question of accountability will remain at the forefront of conversations about privacy, surveillance, and sovereignty.

At Plutus DeFi, we’re on a mission to bring privacy to decentralized finance (DeFi) by integrating popular DeFi legos with cutting-edge privacy tools to enable privacy-by-default in DeFi solutions.

Our privacy-focused lending aggregator will be available for beta testing in the coming weeks. To sign up as a beta tester, please visit our website at https://plutusdefi.com/.