One of the biggest stories in crypto law is the news that the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is working to tackle self-hosted wallets in crypto.
A document outlining the proposed rule suggests that exchanges and other virtual asset service providers need to verify the name and address of those attempting to withdraw more than $ 3,000.
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Proposed rule makes no sense
While this is being done to prevent crypto crime, some think it doesn’t make sense.
Kathryn Haun, a general partner at a16z with a focus on crypto assets, wrote on this topic:
“Late yesterday, instead of following this process, @ stevenmnuchin1 cut the normal comment deadline on a Friday before the holidays to just 15 days as crypto rules don’t make much sense to us @ a16z and others in the crypto room.”
There are others who have pointed out that this is redundant and just one way to prevent users from controlling their own funds. As it is, most regulated exchanges have to take over the names, addresses, and other details of traders who use fiat. This new rule doesn’t change much, and actually goes further than traditional financial institutions need for cash transactions.
This rule attracted so much attention that members of the US Congress filed a written letter against the Treasury Department.
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US Treasury Department’s proposed crypto ruling against Congressmen
In a December 31 letter to the Treasury Department, 9 congressmen wrote that they had concerns about the FinCEN’s proposed crypto decision:
“We are writing to express our concerns about the process of responding to the Financial Crimes Enforcement Network (FinCEN) announcement of the Proposed Rule-making (NPRM) requirements for certain transactions in convertible virtual currencies or digital assets.” We share your goals of protecting national security and assisting law enforcement in their efforts to combat criminals who want to engage in money laundering, illegal financing and other criminal activities. However, we are concerned that the Treasury Department’s approach to setting complex new rules for recording and reporting transactions in convertible virtual currency and legal tender digital assets does not provide the American public with an adequate opportunity to respond. “
The group appears to be most against the lack of time the American people and others have to respond to the proposed decision.
The group that mailed this letter includes Tom Emmer, Tom Cotton, Warren Davidson, Tulsi Gabbard, and a number of other members of Congress.
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