Some banks have quietly updated their policies to allow monitoring of customers’ social media profiles. The change poses a serious threat to the privacy of bank users and provides yet another reason to consider decentralized alternatives.
According to a July 23 report by 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 such checks on sites like Facebook and Twitter.
Big banks now face increasing pressure to disclose the checks they perform on customers. Especially after Nigel Farage, the former leader of the UK Independence Party (UKIP), discovered that exclusive bank Coutts had closed its accounts. The reason? The pro-Brexit maverick had views that were not aligned with the bank’s values.
A dossier 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 EU.
The UK government is examining three other banks, Metro Bank, Yorkshire Building Society and American Express, for alleged account closures based on customers’ political views.
However, bank account closures are not always politically motivated. Users of the Coinbase crypto exchange have reported that Bank of America has closed its accounts. Presumably out of aversion to risky behavior.
The revelation that banks are monitoring their customers gives some yet 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 privacy options
DeFi is also designed to resist censorship. Transactions and interactions within DeFi are generally permissionless, meaning users can participate without the need for approval or intervention from a central entity.
Several sources told BeInCrypto that they are concerned about the bank policy changes. They were candid that these metrics highlight the benefits of DeFi.
Elena Nadolinski, CEO of the Iron Fish Foundation, believes the recent revelations are accelerating DeFi’s path to a decentralized, inclusive and privacy-focused financial future.
“People are increasingly using DeFi as an alternative or complement to their banking needs. Trading in USD, and even earning a return in USD (or USD-indexed assets) has now become incredibly easy. Even for people outside the United States,” Nadolinski said.
However, as decentralized finance grows, the pressure on the industry to comply with financial standards also increases. DeFi is currently facing increasing pressure to fight money laundering and behave like traditional banks.
In fact, a new bipartisan bill in the US would force large 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 rather than the manager of a fund or stock exchange.
US officials have repeatedly called out DeFi for allowing criminals to launder their illegal earnings.
In accordance with the guidelines of the Trust Project, BeInCrypto is committed to providing impartial and transparent reports. This news article aims to provide accurate and timely information. However, readers are urged to independently fact-check and seek professional advice before making any decisions based on this content.