Ethereum Watch

UPDATED | June 27, 2018:

On June 25, an amended version of H.R. 6069, also known as the Fight Illicit Networks and Detect Trafficking Act of 2018 (FIND), was passed by the US House of Representatives. On June 26, the bill was received by the Senate.

Changes include amendments to Sections 2 and 3 of the bill. Section 2 of HR6069 lays out the basis of need for the bill. The amended section now states:

“(2) The Treasury Department has recognized that: ‘The development of virtual currencies is an attempt to meet a legitimate market demand. According to a Federal Reserve Bank of Chicago economist, United States consumers want payment options that are versatile and that provide immediate finality. No United States payment method meets that description, although cash may come closest. Virtual currencies can mimic cash’s immediate finality and anonymity and are more versatile than cash for online and cross-border transactions, making virtual currencies vulnerable for illicit transactions.'”

Section 3 outlines specifics of the proposed Government Accountability Office (GAO) study. If passed, the comptroller general will now be responsible for investigating and reporting:

“(7) how virtual currencies and their underlying technologies can be used to detect and deter these illicit activities; and

(8) to what extent can the immutable and traceable nature of virtual currencies contribute to the tracking and prosecution of illicit funding.”

These changes imply the government’s awareness of blockchain technology’s appeal to criminals, as well as its potential to serve as a mechanism for surveillance of those same criminals, which suggests a basic awareness that the technology is versatile. However, FIND does not include any amendments acknowledging that entities other than the government are using blockchain technology to prevent sex trafficking, and that any proposed legislation intended to help victims of sex trafficking may interfere with existing, nongovernmental blockchain-based solutions.  

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ORIGINAL | June 16, 2018:

On June 12, California representative Juan Vargas (D) and Pennsylvania representative Keith Rothfus (R) introduced a bipartisan bill called the Fight Illicit Networks and Detect Trafficking Act of 2018 (FIND), which is calling for a study into how virtual currencies are being used to buy, sell, and facilitate sex and drug trafficking. 

FIND cites governmental and news media reports that virtual currencies are increasingly used for illicit activities.

If passed, FIND would require the comptroller general of the United States (currently Gene L. Dodaro) to implement a study into who is using online marketplaces and cryptocurrencies for illegal transactions, and how they are using them. The comptroller general would then be required to submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, within one year of the act’s enactment. This report would include the study’s findings as well as any resulting policy recommendations.

Congress would then use the FIND report to craft “legislative or regulatory action that would improve the efforts of Federal agencies to impede the use of virtual currencies and online marketplaces in facilitating sex and drug trafficking.” 

In a June 13 press release, Vargas said:

“Congress must understand the full extent of how virtual currencies are being used to facilitate drug and sex trafficking and propose legislative solutions to fight these crimes.”

On its surface, FIND is a bipartisan bill addressing pressing human rights concerns. But given a larger context, it becomes more controversial.

This bill comes in the wake of FOSTA-SESTA, a recent law that makes website publishers responsible for third parties posting ads for prostitution on their platforms. The law was intended to help prevent sex trafficking, but it had the unintended consequence of putting many consensual sex workers and others seeking sexual encounters online at further risk of exploitation and violence.

Because prostitution is typically illegal, there are few safeguards in place to allow sex workers to screen clients. While it was never perfect, the internet became one of the few tools sex workers could use to help protect themselves. They created online communities to communicate about abusive clients and facilitate systems of recommendation. Online platforms also allowed sex workers to interact with potential clients prior to agreeing to meet with them. This kind of vetting is especially important for gender nonconforming and transgender members of the industry.

After the implementation of FOSTA-SESTA, some have noted an increase in the number of sex workers on the streets, which makes them vulnerable to pimps. Others find fault with the law because online solicitations once acted as evidence in cases of missing persons.

There is a common narrative that the primary use for cryptocurrency and blockchain technology is for buying, selling, and distributing illicit information and products. The logic goes, if you’re not doing anything wrong, then why don’t you want anyone to know? 

It is undeniable that crypto can be used for illegal activity and that it can be used to do significant harm. That much is well-documented. However, it is also true that cryptocurrencies and other blockchain technologies can serve as safeguards for some of the most vulnerable populations, including consensual sex workers working legally or illegally.

Just as we found in the wake of FOSTA-SESTA, sex workers have long used technology to screen prospective clients without the need for a pimp. Now, FIND threatens to further encroach on tech spaces on the fringes of FOSTA-SESTA’s reach.

Hussy.io, a Dapp running on Ethereum, offers sex workers and their clients a screening platform, and allows clients to pay in virtual currency. Sex workers upload proof of their identity, including their age, as well as documentation of up-to-date STI test results.

There are also mechanisms to protect the service provider in case of abusive or inappropriate actions by the client; in the event of an unfavorable altercation, the provider will have received a deposit from the client, which can be frozen and held until the client submits KYC verification and completes a dispute process. Both parties can then leave reviews at the end of the transaction, which can be viewed by other users before agreeing to an interaction. 

Hussy.io advertises itself as resistant to FOSTA-SESTA, but if FIND makes the same mistakes in overlooking the value of online platforms to protect sex workers: it could threaten platforms like Hussy.io.

If FIND passes, the comptroller general should consider the state-to-state variability in the legal status of sex work when conducting this investigation, as well as the ways in which certain regulations against sex traffickers can have devastating implications on consumers and providers of legal forms of sex work, such as pornography. 

FIND cites data from the International Labour Organization to state that, “In 2016, 4.8 million people in the world were victims of forced sexual exploitation.” Rothfus and Vargas are not mistaken about the gravity and scope of the issue, but it is not clear that they recognize how cryptocurrencies and blockchain technology can help prevent sexual exploitation.

Sex trafficking is a pressing human rights concern that should not be ignored by policymakers, but it is crucial that legislation is crafted after nuanced consideration of data, rather than the broad brush of moral panic and fear.

Alison is an editor and occasional writer for ETHNews. She has a Master’s in English from the University of Wyoming. She lives in Reno with her spouse and growing animal family. Her favorite things to do include binge listening to podcasts, getting her chuckles via dog memes, and spending as much time outside as possible.

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