Following weeks of speculations, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed a new set of regulations on self-hosted crypto wallets. The organization gave stakeholders 15 days to respond to the propositions, but Coinbase has continued opposing the idea and asked for an extension of that period.
FinCEN’s Newly Proposed Crypto Regulations
The cryptocurrency community has speculated on rumors that the US Treasury could be working on new legislation for self-hosted digital asset wallets. FinCEN made it official last week when the Bureau announced the long-anticipated proposal.
Under this notice of proposed rulemaking, banks and money services businesses (MSBs), which include cryptocurrency companies, would be “required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds.”
Registered cryptocurrency exchanges will need to keep records of the customers’ transactions and counterparties. This includes the verified identity, or if the counterparty has used an “unhosted or otherwise covered wallet” in case the transaction is greater than $3,000.
US Treasury Secretary Steven Mnuchin, who will be leaving his post in the following month, said that this proposition addresses “substantial national security reports” involving cryptocurrency usage.
“This rule, which applies to financial institutions and is consistent with existing requirements, is intended to protect national security, assist law enforcement, and increase transparency while minimizing the impact on responsible innovation.” – he added.
The statement said that all MSBs have 15 days to respond with comments.
Coinbase Asks For More Time
The US-based digital asset exchange Coinbase opposed the regulations even before they became official. The company doubled-down on its belief that such legislation would harm the country’s progress in the crypto industry and asked for more time given the current situation in a recent blog post.
Serving as an open letter to Kenneth Blanco, the director of FinCEN, the post said that a 15-day period, spanning through the holidays in the middle of a global pandemic, is not enough. This leaves only a few working days for all affected organizations to go through the 72-page document and send their comments.
Coinbase Chief Legal Officer Paul Grewal classified FinCEN’s decision as “unfortunate and disappointing,” and this latest “NPRM is not how effective regulation is made.” Consequently, the statement asked that the bureau “reconsider its haste” and provide the typical period of 60-days for such proposed rulemaking.
“There is no emergency here. There is also no justification for treating the cryptocurrency industry so differently from our counterparts in traditional finance. The same rationale applies even more so in the midst of a global pandemic.” – reads the post.