CFP96 Plenary Session

Electronic Money: Threat To Law Enforcement, Privacy, Freedom, Or All Three?

• Report on the session from the CFP96 Newsletter
• Recording of the session (in RealAudio format)
• Paper by Simson Garfinkel

Law Enforcement Agencies and the federal government are downright fearful of anonymous electronic payment systems. Such systems, they argue, will make it possible for criminals to launder money, hide ill-gotten gains, and contract for illegal payments and services as never before.

But what is the alternative---"Clipper Cash"? Digital money that offers only conditional privacy, or no privacy at all. Escrowed identities for escrow bank accounts? For many, the questions raised by such a proposal go beyond the simple "who holds the keys?"

What kind of privacy is necessary to safeguard transactions? How can purchase data be misused? How could law enforcement prevent a system for anonymous micropayments from being manipulated to make large-scale, anonymous payments? If a private organization creates an anonymous, encrypted digital cash system, how will the government regulate it? This panel will aim to set the ground-rules for the digital money discussions that are expected in the forthcoming three years. It will look at payment systems based on cards and on the Internet, examine the law enforcement perspective on money laundering, and look at the role of companies like America Online, Netscape, Microsoft and VISA in developing competing standards.

Moderator: David Chaum will describe the competing technologies, with attention to privacy and to law enforcement. Dr. Chaum, managing director of DigiCash, is widely regarded as the inventor of the concept of anonymous digital cash. He received his Ph.D. in Computer Science from the University of California at Berkeley, then taught at New York University Graduate School of Business Administration and at the University of California, and headed the Cryptography Group at CWI, the Dutch nationally funded center for research in mathematics and computer science, before taking his current position. He has published over 45 original technical articles on cryptography and also founded the International Association for Cryptologic Research. Contact: david@digicash.com / +31 (20) 592-4169

Panelists (partial list):

• Stan Morris is Director of FINCEN (Financial Crimes Enforcement Network), the federal agency devoted to detecting financial crimes. FINCEN employs a sophisticated set of financial investigative techniques including the monitoring of wire transfers, reporting by banks of suspicious deposits and withdrawals, mandatory reporting of large cash transactions, and the sophisticated use of computers and artificial intelligence models to detect patterns of illegal use. Mr. Morris will provide a background on financial crimes, give a few examples of financial crimes that required rule changes in order to catch them, describe FINCEN's role, and explain the government's concerns about digital cash.

• Kawika Daguio is the Senior Federal Representative for Operations, Retail Banking, and Risk Management for the American Bankers Association. Contact: kdaguio@aba.com / (202) 663-5434

• Rafael Hirschfeld has been working as technical director of the CAFE (Conditional Access For Europe) Project, which is a consortium of 13 European organizations that have designed and are testing a system for electronic consumer payments based on smart cards and hand-held electronic wallets. He has been at CWI, the Dutch National Research Laboratory for Mathematics and Computer Science, for three years. Previously, he was at MIT, from which he holds a master's in Computer Science. He is doing graduate work on electronic money. Contact: ray@cwi.nl / +31 (20) 592 4169

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