Paradigm Files Amicus Brief Defending Financial Privacy on Public Blockchains

Publishing Date: August 24, 2026

Today Paradigm filed an amicus brief in Carman v. Bessent, urging the court to strike down part of a federal law known as Section 6050I. For those who don’t know, Section 6050I forces millions of Americans making ordinary crypto transactions to connect their name, address, and Social Security number to their otherwise-pseudonymous wallets, and to then hand that information to the IRS or face a felony prosecution. That is a quintessential Fourth Amendment search, and Section 6050I authorizes it with no warrant, no probable cause, and no judge. Civil liberties don’t disappear just because someone moves their finances onchain.

The story of Section 6050l is a common one: a good idea in the analog world of the past transmogrified into a bad idea in the digital world of today. Section 6050I was built four decades ago, and requires reporting personal information about cash transactions (or a series of smaller transactions) that exceed $10,000. But in 2021, a seven-word amendment—buried in a thousand-page infrastructure bill and added without any hearings, findings, or committee report—expanded the statute to also cover “any digital asset.”

The problem, and what Congress would have discovered if it had taken the time to consider this late-night addition, is that cash and crypto are nothing alike. In a ten-dollar cash transaction, your counterparty learns that you had ten dollars but can learn nothing about your prior (or future) cash transactions. In a ten-dollar crypto transaction, your counterparty learns that you had ten dollars and can learn about every transaction your wallet ever made, backward for years and forward indefinitely. Similar payment systems perhaps, but very different civil liberties dangers.

Section 6050I steers headlong into those dangers. It forces you to hand over your legal name, address, and Social Security number. It requires you to verify that information against a government ID and connect it to your wallet. It reveals your church donations, your political contributions, your kids’ basketball camp fees—all of it. It then hands over this mass file of your life and personal data to the government, under penalty of perjury and threat of felony, for any government agency (foreign or domestic) to access.

This is a treasure trove of personal private information, surrendered at the state’s demand without clear need, and thus it cannot stand. President Trump’s Executive Order 14178 already makes it federal policy to protect the ability to transact on public blockchains, and the President's Working Group supports civil liberties protections for private transacting. The court in Carman has an opportunity to recognize what the administration already has: Americans do not surrender the Fourth Amendment by choosing a technology that happens to keep a public record.

The full amicus brief is available [here].