By Tobi Loba
A few weeks ago, the CEO of Coinbase Brian Armstrong briefed the cryptocurrency ecosystem of a ground plan of the Financial Crimes Enforcement Network (FinCEN) to clampdown on self-hosted crypto wallets.
Back then, Armstrong described this proposed rule as burdensome and risky for the future of cryptocurrency at large.
According to the document that outlines the proposed crypto wallet rule, exchanges and other virtual asset service providers will be obligated to verify the name and address of any user that attempts to withdraw over $3,000.
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Although the rule was specifically proposed to prevent cryptocurrency-related crimes, some are of the opinion that this does not make any sense.
Regarding the issue, a general partner at a16z, Kathryn Haun, wrote:
“Late yesterday, instead of following that process, @stevenmnuchin1 slashed the ordinary comment period to just 15 days, on a Friday before the holidays no less, for crypto regulations that to us @a16z and others in the crypto space don’t make much sense.”
Others have also termed this proposed rule as unnecessary. They see it as a new means to prevent users from controlling their funds.
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U.S. Congress Members Oppose the Proposed Crypto Wallet Rule
In a letter sent to the Treasury on 31st December 2020, nine members of the United States Congress wrote that there are concerns over the proposed crypto ruling initiated by FinCEN.
The letter reads as follows:
“We write to express our concerns regarding the process to respond to the Financial Crimes Enforcement Network’s (FinCEN) Notice of Proposed Rulemaking (NPRM) related to “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets”.
“We share your goals of protecting national security and supporting law enforcement in their efforts to combat criminals who seek to engage in money laundering, illicit financing, and other criminal activity.
“However, we are concerned that the Treasury Department’s approach to establishing complex new rules for the recordkeeping and reporting of convertible virtual currency and legal tender digital asset transactions do not afford the American public a reasonable opportunity to respond.”
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According to the letter, the group of congressmen seemed to be opposed to the lack of time given to the public to respond to the proposed ruling.
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