FinCEN has extended the discussion period for the regulation of cryptocurrency wallets. Previously, industry participants said the rules would complicate the work of the sector and require more discussion.
The Financial Crimes Enforcement Network (FinCEN) said it will extend the proposed discussion period for cryptocurrency wallet rules by 15 days for reporting requirements and 45 days for counterparty filing and reporting requirements.
The rules, presented by FinCEN on December 18, will require exchanges to store information about clients transferring cryptocurrency worth more than $ 3,000 per day to private cryptocurrency wallets, as well as transaction reports of users who make transactions in crypto assets worth more than $ 10,000 per day.
Industry participants criticized the regulation and noted that for some projects it would be technically impossible to comply with it, since smart contracts and decentralized tools do not have information about the user’s name or address that needs to be provided.
FinCEN said the proposed reporting requirements are “equivalent to existing requirements that apply to currency transactions.” According to the regulator, this is a “vital” proposal to close loopholes that could be exploited by terrorists or other attackers.
Discussion of reporting requirements was extended by 15 days. Regarding the extension of the comment period for the requirements for the documentation and reporting of counterparties, the regulator noted:
“FinCEN provides a longer period in light of the greater complexity of aspects of the proposed rule and the various issues identified in the comments that were received during the initial discussion period.”
It was the piece of regulation that generated the most controversy in the industry — over 7,000 comments were submitted by industry participants, with a majority of respondents criticizing the rule or the speed with which it was intended to be adopted.
The Chamber of Digital Commerce said that if the rule is implemented as proposed, “this rushed regulatory development process will have a number of unintended consequences that pose serious privacy concerns.”
The extension of the discussion period does not mean that the regulation will not be adopted. A new comment period will open upon publication in the Federal Register on January 15th. Fight for the Future Product Director Dayton Young commented on the FinCEN initiative:
“We urge the Biden-Harris administration to listen to public opinion and reject the previous administration’s encroachment on our privacy rights. We need more than just a change of leadership in the Ministry of Finance. We need a change in values and ideology if we hope to stop financial supervision. ”
As a reminder, in December, cryptocurrency exchange Coinbase asked the US Treasury Department to extend the discussion period for the proposed regulation of non-custodial wallets from 15 to the standard 60 days.
In January, Twitter co-founder and Square CEO Jack Dorsey called FinCEN’s new crypto wallet regulation as disastrous to the industry.
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