🟪 The Right to Bear Crypto

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The Right to Bear Crypto

The right to publish and use cryptography in the United States is rooted in our First Amendment right to free speech. 

Once banned, cryptography was legalized in 1997 when Bernstein v. United States was decided in favor of the plaintiff, who successfully argued that code should be considered speech and therefore protected by the First Amendment.

For cryptocurrency, however, the First Amendment may not suffice — because people deem money to be more dangerous than speech. 

The ability of Hamas, for example, to raise a small portion of their funding in crypto was cause for weeks of front-page headlines and Congressional hearings.

But terrorists’ ability to coordinate attacks via freely available services like Signal and WhatsApp (both encrypted!) and recruit impressionable young supporters via social media has received nary a mention.

Money gets all the attention — and all the government restrictions, too — because terrorists sending money seems scarier than terrorists sending messages.

Crypto, of course, is a way to send money, which makes it scary for a lot of people — government people especially, it seems.

So, to preserve our access to dangerous cryptocurrency, our First Amendment right to free speech may not suffice.

Instead, we may need to appeal to the ever-controversial Second Amendment. 

Our constitutional right to bear arms might give us the right to bear crypto, too.

A well-regulated Crypto, being necessary to the security of a free State…

Equating crypto with arms probably sounds like a stretch to you (because it is), but hear me out.

Cryptocurrency is first and foremost cryptography, and cryptography has been deemed a weapon by the US government. When Daniel Bernstein requested government permission to export his one-way hash function, Snuffle, the State Department denied his request on the basis that Snuffle, being cryptography, was a “munition.”

So, if the First Amendment hadn’t secured our right to cryptography as speech, the Second Amendment could well have secured our right to hold it as a weapon — say, to defend our privacy against government intrusion.

You might reasonably object that cryptography is in no way necessary for a “well-regulated Militia,” but US courts have taken a much broader interpretation of the awkwardly worded Second Amendment.

The intention of the Second Amendment, according to the 5-4 majority in District of Columbia v. Heller, was not just to confer a collective right of citizens to form militias in the case of foreign invasion or trouble on the western frontier.

It was also intended to confer an individual right to bear arms in “defense of self, family, and property,” as Justice Scalia wrote on behalf of the (narrow) majority.

Further, the Second Amendment was deemed to include citizens’ rights to “resist tyranny” imposed by a government, be it foreign or domestic.

For this, Scalia cited the English Bill of Rights of 1689, which allowed protestants to bear arms in self-defense against the King's forces. 

(The English Bill of Rights is considered by some to be a guide to the founding fathers’ intentions with the Second Amendment.)

Antiquated as that reasoning sounds, it may be as applicable to cryptocurrency as it is to more conventional weaponry.

Certainly, you have a right to bear arms in defending against a home invasion in which someone attempts to steal the cash you keep in a safe or the bitcoin you keep in a hardware wallet. 

But what about the right to defend that same property against a government that intends to steal your money by printing trillions more of it?

Many view that as financial tyranny, and therefore feel resistance is justified.

By that logic, then, cryptocurrency might be seen as both the property to be defended and the weapon with which to defend it — a weapon to be deployed in a defensive war against Elizabeth Warren’s anti-crypto army.

If that seems unnecessarily martial, consider that the US dollar is ultimately backed by the government’s “monopoly on violence.”

The US dollars the government prints so freely have value primarily because they are the only way to extinguish your tax obligations (as economists phrase it).

Newsletter readers are happy to pay their taxes because they’re law-abiding citizens who like roads and fire departments and stuff. 

But not everyone is — and the government’s ability to impose taxes on those unhappy people is a function of its ability to physically confine them to prison if they don’t pay them.

Taxes have to be paid, regardless — that’s in the Sixteenth Amendment.

But you should be able to defend the value of your property by holding it in crypto right up until tax day, if you so choose.

That might be in the Second Amendment.

I’ll see you in court

In reluctantly announcing the SEC’s approval of spot bitcoin ETFs last week, Gary Gensler couldn’t resist making a disapproving dig at crypto: bitcoin, he said, is “used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”

So Gensler clearly agrees with the State Department that cryptography should be classified as a weapon.

Should it therefore be protected by the Second Amendment?

Not necessarily. 

There’s a “dangerous and unusual weapons” exclusionary clause to the Second Amendment, which means that not every weapon is allowed to be used, even in self-defense.

But if crypto is as dangerous as Gensler makes it out to be, whether that is too dangerous (and unusual) for Americans to bear is a debate that needs to be had.

So why not make it a constitutional one?

It worked for cryptography — and the gun lobby.

It might work for crypto, too.

― Byron Gilliam

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In today's episode Jason is joined by Michael Sonnenshein, CEO of Grayscale Investments, to discuss the long-awaited approval of a Bitcoin spot ETF and its implications.

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