UN Expert Warns Against Overly Broad Regulation of Virtual Assets
Geneva - A United Nations expert has cautioned against overly broad regulation of virtual assets, warning that it could have unintended consequences for human rights, including the right to privacy and freedom of association.
UN Special Rapporteur’s Concerns
The Special Rapporteur on the Right to Privacy, Joseph Cannataci, highlighted concerns that current regulations may be too sweeping and fail to strike a balance between security measures and individual freedoms. He emphasized that any restrictions on the use of virtual assets must be carefully tailored to specific legitimate aims and proportionate to the risks they seek to mitigate.
Impact on Individual Freedoms
Cannataci warned that overly broad regulations could lead to “undue restrictions” on individual freedoms, including:
- The right to freedom of association
- Peaceful assembly
- Political speech
- Human rights advocacy
- Humanitarian activities
He cited examples of restrictive CFT measures requiring governmental vetting of fundraising activities or other approvals and reporting requirements for the use of new financial technologies.
Importance of Transparency and Accountability
Cannataci emphasized the importance of transparency and accountability in data processing and storage. He noted that blockchain technology, which permanently records transactions, raises concerns about:
- The collection and retention of personal data
- Ensuring users have greater control over their data
He called for measures to ensure that individuals have control over their data and can have it erased from public records if they so choose.
Timely Warning
Cannataci’s comments are particularly timely as several countries are considering or implementing regulations on virtual assets and new payment technologies. The UN Human Rights Council has emphasized the need for human rights-compliant approaches to regulating these innovations, given their potential to expand financial inclusion and promote sustainable development.
Conclusion
In conclusion, Cannataci urged regulators to adopt a proportionate and human rights-compliant approach to regulating virtual assets, one that balances security concerns with individual freedoms. He emphasized that any restrictions must be “limited to the strictly necessary” and designed to meet specific legitimate aims, rather than imposing blanket assumptions about the level of risk based solely on technological features.
Right to Be Forgotten
Cannataci’s comments also touch on the concept of the “right to be forgotten,” which has been a topic of debate in recent years. The right to be forgotten refers to an individual’s ability to have their personal data deleted or removed from public records, particularly when that data is no longer necessary for its original purpose.
In conclusion, Cannataci’s comments highlight the need for a balanced approach to regulating virtual assets, one that balances security concerns with individual freedoms and ensures that individuals have control over their own data.