Every Friday, Law Decoded provides an analysis of the week’s critical policy, regulatory and legislative stories.
Armed National Guardsmen are building concentric perimeters of black barricades around the Capitol and the entire neighborhood of federal buildings in preparation for Biden’s inauguration and are protesting Wednesday. That inspires a déjà vu, whether it is last week or last summer.
However much history repeats itself, the present time seems to be stuck in its own course. Remember last week’s Decoded Act was mostly about the transfer of presidential power in the US? This is also going to be about that. Excuses; I also hope this no longer dominates the news.
In the same vein, today’s main stories will feature a cast of characters eerily similar to last week’s. If it’s any help, their main role in today’s plot is that they’re all about to change.
Check out the platform
One consequence of last week’s violence in the Capitol was the blocking of President Trump’s Facebook and Twitter accounts. Twitter and Square CEO Jack Dorsey wrote one extensive thread on last night’s decision, pointing to what many see as the crux of the current technical dilemma. Platforms make their own decisions in a free market, but consumers have little free choice between providers when a small group of large companies act collectively.
Facebook and Twitter subsequently removed a number of far-right accounts – a decision they are certainly allowed to make by law. Many of those accounts migrated to encrypted channels like Telegram and Signal, which saw a wave of bad press attacking them for encouraging extremism. A combined blockade from Apple, Google and Amazon Web Services appears to have completely strangled Parler, a well-known online hangout for white nationalists. And it’s not just social media. Stripe, PayPal and Square announced that they would stop payments to organizations associated with last week’s meetings. Ahead of Wednesday’s inauguration, AirBNB closed the DC area rentals after talks with the mayor’s office, with a number of local hotels joining them.
Let me be clear: I have no patience with “stop stealing,” QAnon, nor the Proud Boys and the whole constellation of white supremacist groups that surround them. As a resident of DC, I don’t really want these protesters here either. But these are some problematic methods. Even Reporters Without Borders, certainly not fans of Trump, called more democratic controls in the face of this massive deplatforming.
While these companies have a free hand to monitor content on their platforms, politicians don’t always need to pass laws to exert pressure and even replace private companies to carry out their bids, which is more of a First Amendment concern . Republicans and Democrats in federal office have been threatening the social media giants in recent years to get them into line. With Democrats having narrowly won the Senate since last week, the recent elimination of Trumpism may be more due to self-preservation than moral awakening. All of that makes me very uncomfortable.
Last week’s attempted insurrection undoubtedly fell outside the bounds of free speech. The authorities should arrest those who stormed the Capitol, especially those who did it to commit violence against elected officials. Twitter and Facebook were right when they cut off Trump’s megaphone. But the US faces some dangerous trade-offs between freedom and security. Dorsey’s ultimate conclusion is especially intriguing: if these platforms are going to function as city squares, they need to be decentralized so that there are no individuals making these calls. But don’t expect lawmakers to wait for that to happen before taking action.
A parting gift from Brian Brooks
Brian Brooks has left the building, but not for an encore.
On Brooks’ last day as head of the Office of the Comptroller of the Currency, the OCC announced that it granted a national charter to Anchorage.
Compliance-oriented crypto-related financial services in the US have traditionally relied on corporate licensing for state money services. The OCC, the national banking regulator, has long flirted with a way to extend that access to more niche fintech companies that may not hold traditional deposits – by freeing them from the FDIC requirements typical banks have, but otherwise to give permission to operate nationally.
The concept is a major rethink of exactly what banking is, and Anchorage is the first recipient. While the idea dates back well before Brooks’ time, he is the most fintech and crypto-forward figure leading the OCC. In just seven months as an acting controller, Brooks has been instrumental in a series of moves to integrate crypto into the financial system.
Brooks’ position is a nominee, however, with a formal nomination from Trump not coming until after the November election. The Senate, preoccupied with presidential shenanigans and seeing a sea change on the horizon, never scheduled a Brooks confirmation hearing.
FinCEN is shrinking
The Treasury’s Financial Crimes Enforcement Network has extended the time frame on its controversial proposal to require crypto exchanges to retain more data on self-hosted wallets they transact with.
This does not mean that the rule has been canceled. Far from it. But one of the main concerns about the proposal was the fact that it only had 15 days to respond, days falling on Christmas and New Years Day and coming immediately before a new government came to power.
The delay was due to an overwhelming response from the crypto industry, sending an average of 500 responses per day. The extended window places the final decision on the proposal in the hands of the next administration. The regulations were part of a common suspicion of crypto by Treasury Secretary Steven Mnuchin, who, in addition to many of Trump’s cabinet choices, was obsessed with uncontrolled capital flows from the US and therefore saw crypto primarily as a threat. While the next government will likely issue a rule based on some of these provisions, Yellen doesn’t quite have the same tradition of international hawkishness.
The Electronic Frontier Foundation argues against companies that, such as Amazon, provide technology infrastructure that acts as a bottleneck for content.
Brookings’ TechStream assesses two new bills which aim to reconfigure competition and data management between digital platforms in the EU.
The Economist gives one (comically reluctantly) interpreter from Bitcoin’s recent bull run.