An office in the Treasury Department is proposing to increase surveillance of cryptocurrency users.
The legislative proposal and its public consultation are rushed, according to experts.
The Office of Financial Crime Management (FinCEN), which is affiliated with the U.S. Treasury Department, is seeking to recover the data of those consumers who withdraw more than $ 10,000 from exchanges and other financial services toward self-bitcoin wallets custody.
Held in the wee hours of Friday, the proposal states that those consumers who wish to withdraw more than $ 10,000 in cryptocurrencies to their personal wallets, They must give details of their identity and personal information. They must also report this data if it maintains a marketing volume in excess of $ 3,000.
The proposal emphasizes cryptocurrency wallets, where the user is responsible for holding the funds. This approach, they claim, tends toward anonymity and it could be used to commit financial crimes and crimes.
Wallet exchanges and services must report the information requested; even in cases where these organizations are not considered financial entities by FinCEN.
Banks and financial services companies are asked to report, keep records, and verify consumer identities in respect of transactions that exceed certain guidelines, including the use of portfolios not held by a financial institution in jurisdictions recognized by FinCEN.
Office of Financial Crime Management, FinCEN.
The name and address of the user, the type of currency or convertible asset used in the transaction, the time and duration of the transaction; are some of the data required by the legislation. The value equivalent to US dollars is also part of it, at the exchange rate at the time it was made.
A rushed law with little time for debate
The office opened the public consultation on this proposal until January 4, a short time for comments (17 days). In addition, the fact that the legal proposal was published late at night brought criticism from the community.
For example, Jake Chervinsky, an attorney and adviser of Composite Finance, points out that the FinCEN deadline is just over 15 days, when the rule is that they exceed 60 days. In addition, it highlights how inappropriate and hasty it is to propose this law in late December and less than a month after changing the presidency of the country. “There’s a name for this: it’s a midnight act,” he said.
However, FinCEN states in the document, at its discretion, in this case, the regulations for waiting time and public consultation do not apply, for national security policies. “The proposal relates to international issues where waiting this time could be contrary to the public interest,” said the body.
The proposal seeks to establish appropriate controls to protect U.S. national security from foreign threats and actors, including state-sponsored ransomware and cyberattacks; avoiding sanctions and financing international terrorism, among others.
FinCEN, United States Treasury Department.
As we reported on CryptoNews last month, Brian Armstrong, CEO of Coinbase, said, He warned of the proximity of a rushed law to regulating self-custody portfolios. The executive then assured the treasury of its intention to issue a new law in this regard before the end of its mandate.
Against surveillance, in favor of privacy and self-sovereignty
Since the proposal became known, views have been felt against it. Experts in various fields, and even a recently elected senator in the US Congress, expressed their concern.
Cynthia Lummis, Senator of the state of Wyoming, spoke about the regulation proposed by FinCEN. In the social network’s Twitter, the representative respected the Treasury’s alleged intentions of wanting to enforce them regulation hostile to self-custody portfolios.
“A key quality of digital assets such as Bitcoin is the ability to negotiate without intermediaries. This encourages financial inclusion and freedom, ”he said.
While the new legislative proposal may raise legitimate concerns, other personalities like Andreas Antonopoulos take with humor what appears to be an attempt to undermine the privacy and usability of cryptocurrencies. The Bitcoin educator pointed out that these types of regulations do not really affect this technology.
“If you try to make payments from a regulated exchange, they will ask you for additional validation and report your transactions to the government. If you use your own portfolio, they will not be able to impose controls on you and will not let you know, ”assured Antonopoulos.
On December 11, FinCEN announced a vacancy for a strategist in cryptocurrencies and emerging technologies, responsible for providing advice and research on regulatory policy creation.
In September this year, an investigation revealed how little effort FinCEN and other government authorities are making to prevent money laundering, knowing that large banking entities in the world are facilitating these operations.