So the rumours were true – It’s been a few weeks since the rumour of a regulation on private wallets in the US was titillating the cryptosphere. The Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed this Friday the implementation of new exchange control obligations towards their customers.
Banking legislation applied to private digital wallets
The US financial police intends to impose verification of the identity of exchange customers when they use an unhosted wallet. All wallets that are not hosted by a regulated body – banks, regulated exchanges, etc. – and all exchange customers who use this type of wallet will be subject to increased surveillance.
There is nothing innovative about these measures. They are simply a transposition of existing banking regulations to the crypto ecosystem. In practice, they require the reporting to FinCEN of all transactions over $10,000, the verification of the identity of all customers and the reporting of suspicious transactions over $3,000.
Hasty and abusive regulation?
This proposal will be open for public comment until January 4, 2021, as required by US law. However, FinCEN has stated that it is a pure courtesy on its part. As an exception, the public comment requirements may be inapplicable if the text in question touches on sovereign concerns – foreign affairs, general interest, for example.
Wyoming Senator Cynthia Lummis, who owns a few satoshis, stated in a series of tweets
„I am deeply concerned about (…) hasty regulation extending bank secrecy regulations to private digital portfolios (…). The regulation in question is likely to be passed without public comment under a provision of the Administrative Procedure Act, which is often abused. Transparency is good policy. It is as simple as that. Let the sunshine in, Mr. Secretary! »
This bill comes as no surprise to anyone. In fact, it has been anticipated by many observers, including the current CEO of Coinbase. Once again, the justification behind these regulatory choices is to limit the use of digital currencies in the context of illicit activities. The press release explicitly refers to Monero and private currencies as having a proven link with various illegal activities.
Translated with www.DeepL.com/Translator (free version)