Opinion by: Lizandro Pieper, Research Director at DeFi Education Fund
The concept of “right to privacy” frequently faces skepticism from those who view privacy as a privilege reserved for criminals, rather than a fundamental right for individuals seeking to live safely and with dignity.
Some policymakers in Washington believe that the collection and retention of the personal data of millions of Americans benefits society, and they argue that emerging financial technologies, like decentralized finance (DeFi), should incorporate such data collection practices—or be prohibited altogether.
This view overlooks the significant risks associated with creating centralized repositories of sensitive personal data. It’s a widely accepted fact among everyday Americans that data has become the most valuable commodity in today’s world. This data must be safeguarded, or individuals risk exploitation.
Demystifying DeFi
Recently, Ipsos and the DeFi Education Fund launched a research initiative titled “Demystifying DeFi,” which includes both qualitative and quantitative insights into the current financial landscape and DeFi. One critical discovery was a widespread concern regarding privacy loss.
Americans expressed the sentiment that their personal financial information is vulnerable and that financial privacy is merely a façade. More than half (54%) of those surveyed indicated that the existing financial system fails to protect their personal data adequately, while 56% believe reforms are necessary to grant individuals greater control over their information. Less than a third of Americans feel that the current US financial structure is secure.
Data breaches and disasters
This sentiment is not surprising, given the increasing frequency of data leaks and breaches involving sensitive personal information in recent years. Consider Equifax’s massive data breach in 2017, which exposed the names, home addresses, social security numbers, and driver’s license numbers of 150 million Americans—nearly half the population.
Numerous other data breaches have taken place since then—almost on a regular basis, with 3,158 data compromises recorded in 2024 alone—and these incidents facilitate criminal activities like identity theft, enabling fraudsters to manipulate financial accounts, execute fraudulent transactions, or empty bank accounts. Consequently, respondents see the protection of their financial data as a basic right and essential for trusting any financial framework, especially given the constant news of breaches and the prevailing feeling that their data is vulnerable and beyond their control.
Moreover, anxieties about the financial system abound among Americans. One Queens, New York resident articulated frustration over the reality that real privacy is nonexistent in finance, leading to feelings of being watched whenever making large transactions, which may require justification.
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Another individual from New York voiced similar concerns, highlighting the lack of freedom from constant tracking and the unjust implications of being marked for suspicious activity.
The surveillance mandate
Clearly, our financial system and the prevailing surveillance mandate foster an atmosphere of guilt until proven innocent—or at the very least, that is the feeling many experience.
The vigilant oversight exercised by our financial institutions and regulators has undermined our financial independence and dignity while failing to fulfill national security aims, endangering our freedoms and the right to live as we wish.
Given this context, over half of the respondents interested in DeFi expressed a desire for complete personal control over the security of their financial information.
The autonomy that comes from privacy is fundamental to DeFi’s identity, tracing back to the cryptographers of the early 1990s, a time when the information age dawned, and the right to privacy began to swiftly diminish due to emerging technologies.
One distinguished figure was Phil Zimmermann, who noted: “Technological advances will not allow for the continuance of the status quo regarding privacy. The status quo is unstable.”
In this light, safeguarding those who create technologies that restore ownership of personal and financial data to individuals is essential.
Surveillance technologies will continue to progress, and malicious entities will persist in exploiting the information they leak, yet we must not remain passive in the face of such developments. DeFi offers viable solutions to these challenges, and Americans display a strong longing for such solutions to emerge. Our elected representatives must prioritize the interests of the American populace.
Time for legislative action
To this end, Congress needs to enact legislation that safeguards software developers from being subject to unsuitable and excessive registration mandates or wrongful legal actions and for the Financial Crime Enforcement Network (FinCEN) to repeal its “mixer rule.”
Software engineers ought to have the freedom to continue crafting privacy-protecting technologies, while existing data collection frameworks must be modernized to ensure they do not harm the individuals the law aims to protect.
If the United States aspires to be the shining hallmark of freedom it claims to be, it must adapt for the people in contemporary ways and uphold the intrinsic right to privacy for all Americans.
Opinion by: Lizandro Pieper, Research Director at DeFi Education Fund.
This article is for general informational purposes and should not be regarded as legal or investment advice. The views and opinions expressed herein are those of the author alone and do not necessarily reflect the views and opinions of Cointelegraph.
