I was researching the dispute between Elon Musk and Alexandre de Moraes in Brazil and I came across some terrible news. It seems that the Brazilian government has ended banking secrecy. Banking institutions will have to show all bank transactions to the government, when requested by the government, something that in the past was much more bureaucratic. Is this a global trend or just an isolated case? I believe that the true purpose of privacy cryptocurrencies will be understood soon, starting in Brazil.
Not a legal expert but it is my impression that all countries with some exceptions do this. That why cayman, Seychelles, Switzerland, Delaware and a few other jurisdictions are “special” places to avoid scrutiny from regulators at some reputational cost from the tradfi establishment.
Maybe someone else more knowledgeable in this things can explain better. @Dodger maybe?
Banking secrecy has been eroded over the years. Undemocratic bodies like FATF draft rules with the stated goal of preventing money laundering and terrorist financing, that all countries are pressured to implement as strict legal and regulatory requirements, while the US has led the charge on requiring information sharing to combat tax evasion (c.f. FATCA).
You should assume that any country or jurisdiction that is connected to the rest of the world’s financial systems (including the Cayman Islands, the Seychelles, Switzerland, Delaware, etc.) has mechanisms in place for allowing some degree of government or law enforcement access to banking and payment card records, at least when there is some reason to suspect criminal activity (either because of suspicious activity observed by the financial institution, or because the account holder is under investigation by law enforcement).
What we’re now seeing is a shift from targeted access to specific individuals’ or organisations’ financial records towards wholesale surveillance, as governments cotton on to the fact that modern technology enables wholesale access to – and datamining of – everyone’s financial records.
From the Google translation of that article, it looks like Brazil is justifying wholesale breach of financial privacy on the basis that it will be used to combat tax evasion. In the UK, they’re claiming that it’s necessary to crack down on benefit fraud.
It’s just the latest in the constant erosion of privacy by governments. There’s always a plausible, reasonable-sounding justification (preventing terrorism, organised crime, child pornography, etc.) but once the mechanisms are in place, the scope will inevitably be expanded to less serious crimes, like a one-way ratcheting noose that ever tightens, constantly eroding and limiting our rights until it becomes co-opted as a mechanism of exerting ever-greater control, and we end up living in fear, unable to speak freely or live our lives the way we want to, without dignity and, in the end, without freedom.
