Governments and financial regulatory bodies across the globe have, in recent years, found themselves in a quandary as to how to best approach the growing cryptocurrency phenomenon. While some government structures have issued warnings , cautioning would-be investors about the risks related to digital assets, digital search laws may threaten the privacy of many a cryptocurrency holder.
While digital search warrant laws in the United States enable law enforcement to legally seize and search the digital devices of suspects, if suspected to contain media that “ contains contraband, is contraband, evidence of a crime, proceeds of crime, or may have been used to commit a crime," New Zealand's newly passed Customs and Excise Act 2018 authorizes customs officials to, not only search a suspects device, but also go as far as demanding a user's passwords.
This law, though touted as a measure to protect the nation's borders, is seen by crypto enthusiasts as a major threat to their privacy and could potentially set a precedent for myriad violations.
Andreas Antonopoulos, in reaction to the digital search law which carries a $5,000 penalty for travelers who refuse to comply tweeted:
Members of the digital assets community also fear that New Zealand's new Customs and Excise Act may inform the search procedures of other multilateral signals intelligence agreement signatories, Australia, Canada, the UK and the US. Worse yet, due to the previously mentioned agreement between the five nations, one nation could use the data collected by New Zealand's customs agents.
The digital era presents many new challenges for law enforcement globally, while at the same time, offering new opportunities for savvy criminals to exploit.
While digital ‘strip searches' may help curtail the reach of cyber criminals and terrorists alike, there is potential for great abuses of power by corrupt authorities. Exposing one's digital assets wallets and other related information to strangers, may not be the most comfortable pill for cryptocurrency investors to swallow.
While regulatory bodies like the IMF and FSB attempt to wrap their heads around the new financial landscape being formed by the cryptocurrency boom and how best to protect investors, it appears that digital search laws that seem not to take cryptographic assets into account may expose digital asset investors to even more risk. The question now is, will global regulators act to ensure that digital asset holders will be sufficiently protected from risks that may stem from digital searches?