u.s. announces new regulations for cryptocurrency wallets
users who want to transfer cryptocurrencies from central exchanges to their own private wallets will be required to provide their personal information to exchanges, according to the us financial crimes research network (fincen) ‘ s new rule proposals on cryptocurrency wallets.
exchanges will also be required to submit and store records related to cryptocurrency transactions.
the rules, published under the title” requirements for transactions of convertible virtual currency or digital assets, ” will subject cryptocurrency wallets to high standards of anti-money laundering if they become law. in other words, it will be very difficult to make anonymous transactions when the rules are implemented.
for withdrawals of more than $ 3k, users will be asked to meet advanced know your customer (kyc) requirements. this includes the credentials of the counterparty to which the customer will send.
for transactions larger than $ 10k, companies will have to report the transaction to fincen. this statement will include the credentials, names and physical addresses of the parties involved.
fincen is also proposing more comprehensive rules to prevent trading anonymously.
the rule will be granted a 15-day period for feedback and comment after it is published in the federal register.
the proposed rules are in line with the travel rule that the financial action task force included cryptocurrencies last year. as is known, the travel rule, which will be mandatory for exchanges to apply next year, also requires the transfer of personal information between companies in exchange-to-exchange transfers.
meanwhile, u.s. treasury secretary steven mnuchin said in a statement that fincen’s proposed rules would protect national security, help enforce laws and increase transparency while minimizing the impact on responsible innovation.
coinbase ceo announced plan weeks in advance and called
it was first announced by coinbase ceo brian armstrong in recent weeks that us treasury secretary steven mnuchin had a plan to introduce regulation on cryptocurrency wallets before he left office.
armstrong stated that this would be a great evil to both the cryptocurrency industry and the united states, and expressed concern that the regulations would have unintended side effects.
“in our view, this regulation would require financial institutions such as coinbase to request the personal information of the wallet owner or recipient before the personal wallet is withdrawn from the exchange, ” armstrong said.” yes, ” he said.
“many crypto users are evaluating their money in new types of online applications. imagine if you wanted to support some content on reddit, or if you wanted to transfer an asset/item in a game, you encountered a form that requested verification of the receiving party’s information. in the form of ” continued.
according to armstrong, this arrangement would be very bad for the united states:
“… because of this, us crypto users will start to prefer non-regulated companies abroad to buy services. in the long term, the status of the us as a financial center will be in jeopardy.”
finally, armstrong called for the release of cryptocurrencies such as the internet.
how has the cryptocurrency world reacted?
following the publication of the proposed rules, numerous statements came from the cryptocurrency world. jeremy allaire, ceo of circle, the issuer of the usdc, a stable cryptocurrency indexed in the us dollar, asked that question on many’s minds:
“how can a person provide the name and address of the opposite party when the opposite party has a defi protocol?”
andreas antonopoulos, a well-known bitcoin advocate and trainer, said::
“the essence of fincen’s rules is that when you try to make payments from a regulated exchange, they will require additional verification and report your transactions to the state. if you use your own wallet… they can’t control you or report your transactions.”
also, antonopoulos said, ” this year the limit will be 3 thousand dollars. they’ll drop him next year. eventually, all transactions will have to be notified and checked.”he said, noting that institutions are unwittingly diverting more people to decentralized alternatives and forcing them to keep their cryptocurrencies in their own wallets rather than in exchanges.
“fincen announces plan to promote dex and privacy coin, ” antonopoulos said in another tweet. bullish!, ” he said.