FinCEN Mulls Sets Proposed Crypto Wallet Regulation, Crypto Community Reactions

On December 18, 2020, the Financial Crime Enforcement Network (FinCEN), took a step closer to implementing its long-awaited crypto wallet regulation.

What’s the Offer?

Under the proposed rule, crypto exchanges would be required to make crypto users comply with your customer’s (KYC) requirements when transferring their digital assets to personal wallets.

FinCEN now appears to be about to implement the new rule after it has recently been posted two job listings for crypto advisors. The professionals would assist the main policy enforcement arm of the Treasury Department in developing policy responses to cryptocurrencies.

These Strategic Policy officers would also issue consultations to contact financial institutions and engage in crypto policy partnerships with the public and private sectors.

Crypto advocate Jack Chervinsky confirmed in a Dec 19 tweet that FinCEN is working on drafting AML regulations for crypto wallets not replaced. He stated:

“If adopted, the rule would require regulated companies to verify the name and address of users of non-custodial wallets for any transaction> $ 3k.”

The crypto community on Twitter the regulatory policies are largely detrimental to the crypto space, as they would stifle the privacy of digital asset holders.

Crypto Exchanges To Identify Personal Wallets

FinCEN’s proposed rule would require users who wish to send crypto from central exchanges to a personal wallet to provide their personal information to the exchanges.

The exchanges would then have to notify regulators of all transactions exceeding $ 3,000, and also submit transaction records that add up to more than $ 10K.

The proposed rule essentially increases the amount of personal data that exchanges have to report to the Treasury Department, undermining the crypto’s original promise of privacy and self-sovereignty.

FinCEN appears determined to close “gaps”Around digital currency transaction reporting and bringing crypto closer in line with the traditional banking system.

The financial watchdog has long expressed its intention to enforce more than just regulatory policies being washed down around crypto to stifle the ability of malicious actors to use homelessness digital wallets in criminal activity.

The public has until January 4, 2021, to provide comments or feedback on the proposed FinCEN regulation that would centralize information on all crypto withdrawals with the US treasury.

Top Crypto Advocates Oppose FinCEN Proposal

Coinbase CEO Brian Armstrong was among the first prominent figures to reveal plans by regulators to require exchanges to verify KYC information for recipients of crypto transfers to a self-sufficient wallet. Armstrong was clearly opposed to the “rush rule” that would infringe on the privacy of crypto users.

Another crypto fanatic and senator-elect for Wyoming, Cynthia Lummis, has come out to oppose the proposed transaction reporting rule.

The senator, who recently indicated that he would promote Bitcoin in congress, tweets that it is very concerned about the move by regulators to govern self-sufficient digital asset wallets.