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Mastodon will get end-to-end encryption for private messages thanks to Sovereign Tech Agency
(blog.joinmastodon.org)
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Yes that is what I mean, admins can only see private messages that their own local users are either sending or receiving. Not from users on other instances.
I agree that privacy is important, but most admins probably couldnt care less what their users are writing in private messages. And there is a tradeoff between implementing end-to-end encryption, or implementing other features that may be more important.