On November 15, 2021, U.S. President Joe Biden signed the Infrastructure Bill into law. Even before it was finalized, the cryptocurrency community raised strong objections to a controversial tax reporting requirement buried within the legislation. Two specific provisions have sparked the most concern:
• The law compels all entities classified as “brokers” to report digital asset transactions — yet offers a vague definition of what constitutes a broker.
• It obligates anyone receiving over $10,000 in crypto to file a report with the IRS within 15 days, including the sender’s personal information, such as their Social Security number and full transaction details.
The second clause has alarmed privacy-conscious users. It not only introduces invasive oversight but also contradicts the decentralized ethos of blockchain technology. Supporters of crypto point to the 4th Amendment of the U.S. Constitution, which guarantees the right to be “secure in their persons, houses, papers, and effects” — a foundation for modern expectations of personal privacy.
Government agencies often argue that cryptocurrency can enable criminal activity, and critics insist that law-abiding citizens shouldn’t fear regulation. However, privacy isn’t about hiding wrongdoing — it’s a basic human right that underpins autonomy and freedom.
The Fundamental Value of Privacy
Privacy International explains that “privacy creates boundaries and allows us to decide who accesses our personal space, data, possessions, and communications.” It shapes identity, fosters independence, and protects against institutional abuse. Without privacy, individuals are vulnerable not only to government overreach but also to cybercrime, surveillance capitalism, and data exploitation.
Controlling personal information is essential in both the physical and digital worlds. Whether it’s shielding your browsing habits from advertisers or protecting your financial data from hackers, privacy provides security, freedom, and dignity.
How to Stay Private When Using Crypto
If maintaining anonymity while using cryptocurrencies is important to you, here are five effective strategies:
• Use decentralized exchanges instead of centralized ones. Centralized platforms typically require KYC verification, meaning you must submit identification documents that permanently tie you to your wallet and transactions.
• Employ a VPN (Virtual Private Network) to hide your IP address. This helps prevent your location and internet activity from being tracked by third parties or blockchain analysis firms.
• Shop with vendors that allow anonymous or pseudonymous payments. Minimizing personal data shared during transactions lowers your exposure to risks.
• Choose privacy-first cryptocurrencies like Monero. Monero masks transaction amounts, addresses, and wallet balances by default, making it virtually impossible to trace funds.
• Secure your funds using a wallet designed for privacy. XMRWallet is a lightweight, open-source Monero wallet that allows users to send and receive XMR instantly without revealing private data. You retain full control of your funds and keys, with no need to download any software.
The reporting requirements introduced by the Infrastructure Bill are expected to be enforced starting January 2024. Until clearer guidance or revised legislation emerges, taking proactive steps now can help you shield your identity and maintain financial freedom in the crypto ecosystem.
