The Erosion of Financial Freedom and Liberty in the United States
A Legacy of Anti-Money Laundering Legislation
Introduction
Financial freedom and liberty have long been cherished principles in the United States, enshrined in the Constitution to protect citizens from government intrusion into their economic affairs. However, over the years, a series of major anti-money laundering (AML) legislations, often initiated in the wake of crises, have curtailed these freedoms. This post will provide a chronological overview of the key AML legislations and their impact on the average American's financial freedom and liberty, while also examining the intrusive regulations surrounding AML and the risks to private data security. It will conclude by highlighting the need to push back against lawmakers and bureaucrats who continue to impede these liberties.
Bank Secrecy Act (1970) The Bank Secrecy Act was enacted to combat money laundering by requiring financial institutions to report transactions exceeding $10,000 and keep records on cash transactions. Its impact on average Americans has been increased scrutiny of their financial transactions and a loss of privacy. What’s especially concerning is that $10,000 in 1970, inflation adjusted, is equivalent to $77,536 today, but the reporting requirement is still $10,000, thereby making it more intrusive each year with inflation.
Money Laundering Control Act (1986) This legislation made money laundering a federal crime and allowed for civil and criminal forfeiture of assets involved in money laundering. It expanded the government's power to investigate and seize assets, infringing upon individuals' property rights and financial privacy.
Anti-Drug Abuse Act of 1988 As a response to the drug epidemic, this Act introduced measures to trace the flow of illicit drug money, such as mandatory reporting of large cash transactions. While well-intentioned, these measures further restricted financial privacy.
Annunzio-Wylie Anti-Money Laundering Act (1992) This Act imposed enhanced AML requirements on banks and required them to implement Know Your Customer (KYC) procedures. While aimed at curbing financial crime, these regulations put average Americans' personal information at risk of data breaches.
Money Laundering Suppression Act (1994) This legislation reinforced AML measures, such as reporting suspicious transactions, and required banks to develop AML programs. It expanded government surveillance, further reducing financial freedom.
Money Laundering and Financial Crimes Strategy Act (1998) The Act broadened the scope of financial crimes and reinforced the government's power to monitor transactions, further eroding financial privacy and liberty.
USA PATRIOT Act (2001) In response to the 9/11 attacks, the USA PATRIOT Act introduced sweeping surveillance measures that included expanded AML provisions. While intended for national security, it significantly encroached upon individual freedoms, leading to serious concerns about government overreach.
Intelligence Reform & Terrorism Prevention Act of 2004 This legislation amended the USA PATRIOT Act, maintaining its surveillance provisions. The impact on financial freedom and privacy was a continued erosion of liberties.
USA FREEDOM Act Introduced in 2015, the USA FREEDOM Act aimed to curb some of the surveillance excesses in the USA PATRIOT Act, but it retained many provisions and eventually expired in 2020, leaving concerns about government surveillance largely unaddressed.
Inflation Reduction Act This 2023 legislation mandated more stringent cryptocurrency transaction reporting, potentially leading to increased government intrusion into the financial affairs of those involved in cryptocurrency transactions. The IRS implementation of this mandate was discussed in more detail in my recent post here:
Recent Bureaucratic Meddling The Financial Crimes Enforcement Network (FinCEN) was created in 1990 to support federal, state, local, and international law enforcement by analyzing the information required under the Bank Secrecy Act. Recently, FinCEN released for public comment a proposal regarding coin mixing. This demonstrates an ongoing bureaucratic push to further control and regulate financial transactions, potentially infringing upon the privacy of individuals. For more on this, check out my recent post here:
And then there’s yesterday’s headline where the Authoritarian State once again cracks down on “financing terrorism”:
When this is reality:
Conclusion
The United States has witnessed a gradual erosion of financial freedom and liberty due to a series of anti-money laundering legislations, often initiated in response to crises. These measures have led to increased government surveillance, data breaches, and a loss of financial privacy and most importantly, freedom, for average Americans.
Despite this extensive legal framework, criminals and terrorists continue to find ways to evade the system and maintain / expand their funding, drawing into question its effectiveness and whether the trade offs of “safety” for financial freedom and liberty are even worth it. Furthermore, the majority of illicit funding (similar to the vast majority of legal commerce) still relies on fiat currency, not cryptocurrencies, undermining the argument for increased regulation in this area, except that the Authoritarians beg to differ:
In light of these challenges to financial freedom and liberty, it is essential for citizens to push back against lawmakers and bureaucrats who propose new legislation or rulemaking that infringes upon these core freedoms. In addition, we should be pushing for a repeal of this legislation, going all the way back to the Bank Secrecy Act as has been suggested by Coincenter. Striking a balance between security and individual liberties is essential to maintaining the principles upon which the United States was founded and avoiding a dystopic future.
Not financial or legal advice, for entertainment only, do your own homework. I hope you find this post useful as you chart your personal financial course and Build a Bitcoin Fortress in 2023.
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