Some banks have quietly updated their policies to enable monitoring of customer 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 the 23rd of July a report Per The Daily Telegraph, major banks have changed their privacy policies. Britain’s largest lenders and many other lenders have hidden language in their privacy policies that allows for the cull of information from social media accounts. In the past, banks have claimed to avoid such checks on sites like Facebook and Twitter.
Major banks are now facing increasing pressure to disclose the checks they make to customers. Especially after Nigel Farage, former UK Independence Party (UKIP) leader, discovered that the exclusive Coutts Bank had closed his accounts. the reason? The pro-Brexit maverick held views incompatible with the Bank’s values.
A file compiled on Farage included examples of his Twitter posts. Farage is a controversial figure in the UK, having led the years-long campaign for Britain to leave the European Union.
The UK government is looking into three other banks, Metro Bank, Yorkshire Building Society and American Express, over alleged account closures based on clients’ political views.
However, bank accounts are not always closed for political reasons. Coinbase users of their cryptocurrency exchange mentioned that Bank of America had closed their accounts. Presumably due to an aversion to risky behavior.
The revelations that banks monitor their customers gives some more reason to consider decentralized finance (DeFi) protocols. From a privacy point of view, 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 middleman.
DeFi is censorship resistant, with more private options
DeFi is also designed to be censorship resistant. Transactions and interactions within DeFi are typically permissionless, which means that users can participate without the need for approval or interference from any central entity.
Multiple sources told BeInCrypto that they are concerned about the changes in the banks’ policy. They have been vocal about the fact that these moves highlight the benefits of DeFi.
Elena Nadulinsky, CEO of Ironfish, believes that the recent discoveries strengthen DeFi’s path towards a decentralized, inclusive, and privacy-focused financial future.
“People are increasingly using DeFi as an alternative or complement to their banking needs. Dealing in USD, and even earning return in USD (or USD-pegged assets) is now very easy. Even for people outside the US,” Nadolinsky said.
However, with the growth of decentralized finance, so does the pressure on the industry to comply with financial standards. DeFi is currently under increasing pressure to crack down on money laundering and act like traditional banks.
In fact, a new bipartisan bill in the US would require major investors in DeFi protocols to take responsibility for financial oversight. Under this legislation, you will not be able to avoid liability for money laundering simply because you are an investor and not the head of a fund or exchange.
US officials have repeatedly called out DeFi for allowing criminals to launder their ill-gotten gains.
Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.