Some banks have quietly updated their policies to enable the monitoring of customers’ social media profiles. The change poses a serious threat to the privacy of bank users and provides another reason to consider decentralized alternatives.
According to a July 23 report in the Daily Telegraph, major banks have changed their privacy policies. Britain’s biggest lenders and several others have hidden language in their privacy policies allowing information to be removed from social media accounts. In the past, banks have claimed to avoid checks on sites such as Facebook and Twitter.
High street banks now face increasing pressure to disclose the checks they make out to customers. Especially after Nigel Farage, the former leader of the UK Independence Party (UKIP), revealed that the exclusive bank Coutts closed his accounts. Reason? The pro-Brexit maverick held views inconsistent with the bank’s values.
A dossier collected on Farage included examples of his tweets. Farage is a controversial figure in the UK, having led the years-long campaign for Britain to leave the EU.
The UK government is looking at three other banks, Metro Bank, Yorkshire Building Society and American Express, for allegedly closing accounts based on customers’ political views.
However, bank account closures are not always for political reasons. Users of the crypto exchange Coinbase have reported that Bank of America has closed their accounts. Apparently over an aversion to risky behavior.
The revelation that banks are surveilling their customers gives some another reason to consider decentralized finance (DeFi) protocols. From a privacy perspective, they may find DeFi a better option.
DeFi is built on the blockchain and is designed to be a “trustless” system. It relies on smart contracts to automate and enforce financial transactions and agreements without the need for a trusted intermediary.
DeFi is censorship resistant, with more private options
DeFi is also designed to be resistant to censorship. Transactions and interactions within DeFi are typically permissionless, meaning that users can participate without the need for approval or intervention from any central entity.
Multiple sources told BeInCrypto that they were concerned about the bank’s policy changes. They were honest about the fact that these moves highlight the benefits of DeFi.
Elena Nadolinski, CEO of the Iron Fish Foundation, believes that the recent discoveries push DeFi’s path towards a decentralized, inclusive and privacy-focused financial future.
“People are increasingly using DeFi as an alternative or supplement to their banking needs. Transactions in USD and even earning yields in USD (or USD-linked assets) has now become incredibly easy. Even for people outside the United States,” Nadolinski said.
However, as decentralized finance increases, so does the pressure for the industry to comply with financial norms. DeFi is currently facing increasing pressure to curb money laundering and behave like traditional banks.
In fact, a new bipartisan bill in the US would require large investors in DeFi protocols to take responsibility for financial monitoring. Under this legislation, you will not be able to avoid responsibility for money laundering just because you are an investor and not a manager of a fund or stock exchange.
US officials have repeatedly called out DeFi for allowing criminals to launder their ill-gotten gains.
In accordance with the guidelines of the Trust Project, BeInCrypto is committed to unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently verify the facts and consult a professional before making any decisions based on this content.