The regulatory framing reveals something fundamental about power dynamics. They're essentially saying "if you make the trusted layer untrustworthy enough, people will opt out entirely"—and treating that outcome as a policy failure rather than an inevitable consequence of their approach. In my years of following this space, I've watched the surveillance ratchet tighten while simultaneously driving more adoption of self-custody practices. The document you're citing proves they understand the causal link but can't accept the premise that privacy might be a legitimate concern. That's the real tell—they're not trying to balance surveillance with privacy; they're trying to eliminate the choice itself.
The regulatory framing reveals something fundamental about power dynamics. They're essentially saying "if you make the trusted layer untrustworthy enough, people will opt out entirely"—and treating that outcome as a policy failure rather than an inevitable consequence of their approach. In my years of following this space, I've watched the surveillance ratchet tighten while simultaneously driving more adoption of self-custody practices. The document you're citing proves they understand the causal link but can't accept the premise that privacy might be a legitimate concern. That's the real tell—they're not trying to balance surveillance with privacy; they're trying to eliminate the choice itself.