S15 E4: Alexis Roussel on Nym, Privacy & Suing the Swiss Financial Regulator

Alexis Roussel is one of the most remarkable and accomplished bitcoiners from Switzerland. He sits on the board of companies such as Relai, Peach, and Bity, but simultaneously advises other projects. He regularly speaks with politicians and regulators from Europe, as he has a background in law and also possesses a great technical understanding of how Bitcoin works.

But regardless of this first impression, Alexis Roussel is no suit-wearing businessman who made bank on the early years of Bitcoin price discovery and chose to live a comfortable, carefree life. At heart, Alexis Roussel is still a cypherpunk with a hacker ethos: he is the Chief Operating Officer (COO) of the Nym project, which aims to take internet privacy to the next level with incentivized mixnets; he is also responsible for a historic addition of digital integrity as a right that’s included in the Swiss constitution.

Most remarkably, Alexis Roussel is currently suing (through Bity) the Swiss regulator FINMA. The goal is to prove that the KYC requirements for purchasing BTC in Switzerland are arbitrary and abusive. If Bity wins the trial, then it can become a powerful precedent which reverts many KYC/AML requirements that make no sense. Also, about the “suit-wearing businessman” part of my previous statement: Alexis wears hoodies and appears to be a fan of public transportation – something which speaks volumes about his focus and goals. He used to be president of the Pirate Party in Switzerland, after all.

My interview with Alexis Roussel was recorded in November 2023, just upstairs from the Relai offices in Zurich, Switzerland. It’s a long but necessary conversation which starts from individual initiatives and then dives into the field of philosophy and human rights. Alexis explains why privacy matters and why it’s never too late to start caring about it. You will also get to learn more about the new Nym VPN which is expected to launch in 2024, and how it can help you surf the internet without being as tracked as you already are.

And yes, you can make a donation to support Alexis’ effort to lift KYC/AML requirements in Switzerland.

Listen to Alexis Roussel on Apple Podcasts, Spotify, YouTube & X!

Season 15 of the Bitcoin Takeover podcast is sponsored by Wasabi Wallet, Cryptosteel, Satochip, and IVPN!

For a more sovereign and private experience, I recommend that you use this free player. You get the exact same audio quality and features as on Spotify, but without any kind of big tech tracking. Not only that, but you can download the episodes on your device for offline listening.

Legal battles against FINMA (00:01:56) Alexis Roussel discusses the legal battles against FINMA, the Swiss regulator, over discriminatory regulations on cryptocurrency transactions.

Challenging FINMA’s regulations (00:03:26) Alexis explains the series of events where FINMA imposed stricter regulations on cryptocurrency transactions, leading to legal challenges.

Crowdfunding and transparency (00:08:31) The discussion shifts to the crowdfunding initiative and the transparency in the legal case against Finma, marking a departure from traditional financial cases.

Procedural and regulatory issues (00:10:18) The conversation delves into the procedural and regulatory issues, highlighting the potential impact on legal precedents and the cryptocurrency industry.

Misguided regulatory decisions (00:15:20) The discussion explores the misguided decisions of Swiss regulators, influenced by tabloid news and lacking understanding of Bitcoin’s positive aspects.

Influence on European regulations (00:22:49) Alexis shares his perspective on the potential influence of the legal case on regulations in Europe and encourages others to challenge discriminatory practices.

Understanding Bitcoin (00:24:15) Lawyers need to understand how Bitcoin works technically and the differences between transaction-based and account-based systems.

Nym Project and Privacy Network (00:28:22) Alexis Roussel discusses the Nym project, a privacy network, and its features such as hiding user communication and launching a VPN.

Nym’s Mixnet vs. Tor (00:32:19) The differences between Nym’s mixnet and Tor are explained, including the prevention of timing attacks and the incentivized network model.

Importance of Mixnets (00:38:02) The importance of mixnets for privacy and how they can benefit service providers by reducing unnecessary data collection.

Criticism and Challenges (00:45:20) Alexis Roussel addresses criticisms related to Nym’s token, network efficiency, and funding sources, and expresses openness to criticism.

The challenges of merging crypto and privacy (00:47:22) Discussion on the challenges of merging crypto and privacy, and the differences in knowledge and perspectives between cryptocurrency and privacy experts.

Funding and incentivization in the crypto environment (00:48:39) Explanation of the shift in funding for the Tor network and the consideration of adding incentivization within the network. Also, the decision-making process for funding and tokenization.

The decision to use a token and the funding model (00:50:47) Explanation of the decision to use a token, the funding model, and the reasons for choosing a token-based system over traditional cryptocurrencies.

Operational plans and user options for payment (00:55:05) Discussion on the operational plans for the mixed net, including user payment options and the intention to provide flexibility in payment methods.

Promotion of a VPN service and its features (00:55:34) Advertisement for a VPN service and its unique features, including Bitcoin and Lightning payments, radical transparency, and no KYC requirements.

Integration of Bitcoin and Lightning payments (00:57:28) Discussion on the integration of Bitcoin and Lightning payments as an option for using the mixed net, and the development of an abstraction layer for payment.

Usage of the mixnet and its accessibility (00:59:23) Explanation of the current methods for accessing and using the mixnet, including the availability of a test software for connecting to the internet through the mixed net.

Privacy, autonomy, and digital integrity (01:02:26) In-depth discussion on the importance of privacy, autonomy, and digital integrity in the digital space, and its impact on individuals and society.

Digital Integrity Protection (01:10:55) Geneva’s constitutional vote for digital integrity protection and its implications for offline life, government interactions, and fundamental rights.

Right to Anonymity (01:13:10) Discussion on the legal arguments for anonymity, the right to pay in cash, and the impact on government surveillance and data collection.

Surveillance Capitalism (01:15:22) Exploring the complicit relationship between private and public sectors, and the impact of data collection on citizens’ rights and privacy.

Future of Privacy and Encryption (01:31:10) Challenges in network discovery for private systems, the interface design for privacy, and the potential for a future economy based on private networks.

Working with Chelsea Manning (01:27:24) Insights into the commitment to privacy and security, and the influence of working with someone who understands the need for privacy.

Investments in Privacy (01:35:39) Discussion on the growing interest in privacy projects and the sustainability of projects like Nym in protecting internet privacy.

Privacy Tools and Decentralization (01:36:08) The importance of privacy projects, the need for a large network for privacy, and the role of decentralization in privacy tools.

Contributing to Nym (01:39:24) Ways to contribute to Nym, including running a node, technical requirements, coding, testing, and providing feedback.

Node Integration and Interaction (01:44:34) The potential integration of Nym into existing devices and platforms, and the long-term plan for interaction and integration.

Trade-offs and Decentralization (01:45:56) Discussion on the trade-offs and challenges of slow decentralization in the Nym project, comparing it to the Tor network, and addressing the need for patience and criticism.

Following Alexis Roussel’s Work (01:49:06) Ways to follow Alexis Roussel’s work, including his involvement in various projects and his social media presence.

Battling for Fairness: The Fight Against FINMA’s Discriminatory Regulations

One of the most pressing topics we tackled is Alexis Roussel’s ongoing legal battle with the Swiss regulator, FINMA. He’s taking a stand against what he perceives as discriminatory regulations that unfairly target cryptocurrency transactions, particularly Bitcoin. Alexis detailed the procedural irregularities and arbitrary decisions that prompted him to take legal action, emphasizing the broader implications for the cryptocurrency industry in Europe and the United States.

His case could serve as a beacon for others in the industry, encouraging them not to shy away from fighting for their rights when faced with regulatory discrimination. The role of lawyers in this space is pivotal, and Alexis’ insights underscore the importance of legal professionals understanding the technical nuances of Bitcoin to effectively advocate for and advise their clients.

The Nym Project: Enhancing Privacy Through Technical Innovation

The Nym project is at the forefront of privacy technology, developing a mixnet to bolster communication privacy and protect user data. Alexis explained the limitations of existing privacy networks like Tor and how Nym’s mixnet offers a more secure alternative. The incentivized model of the Nym mixnet ensures the economic viability of running a node, addressing potential network attacks.

We delved into the significance of mixnets in the context of stringent regulations like GDPR in Europe. Alexis envisions a future where service providers and application developers leverage mixnets to enhance user privacy and reduce the burdens of data management.

Overcoming Nym’s Criticism and Embracing Diverse Expertise

The Nym project has faced its share of criticism, from the existence of its token to concerns about network efficiency and funding sources. Aleis addressed these points head-on, explaining the technical and economic rationale behind the Nym token and the project’s commitment to transparency and constructive feedback.

He also highlighted the diverse backgrounds of the Nym team, which includes experts from cryptocurrency, privacy, and network domains. This diversity is crucial in bridging the knowledge gap and fostering a comprehensive understanding of the project’s goals and challenges.

Digital Integrity: A New Frontier in Human Rights

A groundbreaking development in 2023 was the amendment of the constitution in Geneva to include digital integrity protection. With a staggering 94% approval rate, this new right guarantees an offline life, security in the digital space, and protection from unwarranted surveillance. This amendment challenges the pervasive surveillance capitalism and underscores the importance of digital privacy as a fundamental human right.

The Future of Privacy: Building a User-Friendly and Private Economy

Our conversation also touched on the technical challenges of building private social networks and the ease of use offered by centralized services. Alexis argued for a shift towards prioritizing privacy, suggesting that a private economy could potentially outperform a data-driven one. The growing investment in privacy technology indicates a rising interest in safeguarding our digital lives.

The Nym Project’s Role in a Privacy-Conscious World

Alexis Roussel shared the various ways individuals can contribute to the Nym project, from running a node to participating in the community’s delegation process. He also discussed the project’s grant programs, which support developers in proposing and funding new developments.

Despite the challenges, such as the slow pace of decentralization, Alexis remains committed to refining the core mixnet and decentralizing it at the opportune moment. He also shared his involvement in other projects like Bity, Relay, and Peach, inviting listeners to follow his journey on social media platforms.

Conclusion: Embracing Privacy and Decentralization

The interview with Alexis Roussel provided a comprehensive look at the Nym project and its pivotal role in the evolving landscape of internet privacy and decentralized tools.

The insights from this episode are a testament to the dynamic and ever-changing world of cryptocurrency and privacy. As we continue to navigate these waters, it’s clear that the fight for digital integrity and the development of privacy-enhancing technologies will be at the forefront of shaping a more secure and autonomous digital future.