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This is a segment from The Breakdown newsletter. To read full editions, subscribe<\/a>.<\/em><\/em><\/p>\n \u201cThe house of every one is to him as his castle and fortress.\u201d<\/p>\n \u2014 Sir Edward Coke, the Attorney General of England, 1604<\/p>\n<\/blockquote>\n<\/figure>\n In 1604, the Court of King\u2019s Bench decided what\u2019s now known as Semayne\u2019s Case in favor of the defendant, Richard Gresham. Gresham had refused to open his door for a sheriff seeking to seize goods in Gresham\u2019s possession to cover a debt.<\/p>\n Establishing what would become a foundational privacy principle \u2014 the home as a protected sanctuary \u2014 Sir Edward Coke reported that \u201cthe house of every one is to him as his castle and fortress.\u201d\u00a0<\/p>\n But even as Coke established those castle walls, he left open a gate for the King\u2019s men to breach them: The court held that officers of the law, if in pursuit of criminal matters, were permitted to break down doors if they had to (but only after announcing themselves first).<\/p>\n 421 years later, that\u2019s still about where things stand.<\/p>\n Semayne\u2019s Case is the ancestral reason why American law enforcement is today required to knock on your door and announce their presence when they have some business there \u2014 and also why they can, in some circumstances, knock the door down.<\/p>\n The Fourth Amendment protects against the search of your castle and seizure of your goods, but only if it\u2019s unreasonable.<\/p>\n That is approximately the current state of financial privacy, too: Your banking transactions are private in the sense that your bank keeps them behind closed doors for only you to see.\u00a0<\/p>\n But if law enforcement comes knocking, they have to open the door for them.<\/p>\n In the world of crypto finance, however, \u201cprivacy\u201d has taken on a different, more absolute meaning.\u00a0<\/p>\n To many in the industry, a \u201cprivate\u201d transaction is one that cryptography makes invisible to anyone but the user \u2014 a true financial castle with no backdoor gate for the King\u2019s men to saunter through at will.<\/p>\n This is a return to crypto\u2019s cypherpunk roots: absolute financial privacy, guaranteed by code.<\/p>\n But how cypherpunk are things really going to get?\u00a0<\/p>\n Sometimes, it seems the answer is very<\/em> \u2014 like when SEC Commissioner Hester Peirce self-identifies as a \u201cfreedom maximalist.\u201d\u00a0\u00a0<\/p>\n As such, Peirce applauds<\/a> the new emphasis on privacy: \u201cWe have to recast the narrative around privacy mechanisms, because it\u2019s become the presumption that if you want to keep your transactions private, you\u2019re doing something wrong.\u201d<\/p>\n That is a remarkably cypherpunk-sounding statement for a government regulator to make.<\/p>\n But what, exactly, does she mean by \u201cprivate\u201d?<\/p>\n \u201cPeople in this country,\u201d Peirce continues, \u201chave a right to keep their financial transactions private absent suspicion they\u2019re engaged in some illegal activity.\u201d And if there is<\/em> a suspicion of illegal activity?<\/p>\n In other words, nothing\u2019s really changed since 1604: \u201cPrivacy\u201d is the ability to keep your information private from everyone other than a government that thinks it has a good reason to see it.<\/p>\n Perhaps surprisingly, lots of crypto people seem to agree \u2014 including some crypto-privacy<\/em> people.\u00a0<\/p>\n\n
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<\/strong>\u201c<\/strong>There are ways for governments to get access to information to bring a case.\u201d<\/p>\n