One of Joe Biden’s first orders after taking office as President of the United States was to freeze all “new or pending” rules under Donald Trump’s rule pending their consideration by the new administration. This includes an initiative by the Financial Crimes Enforcement Network (FinCEN) launched under previous Treasury Secretary Steven Mnuchin on December 18.
Under its terms, regulated companies, including exchanges, must collect and confirm additional data when a client attempts to withdraw cryptocurrency to a private wallet. Cryptocurrencies are not directly mentioned in the memorandum, however, among other departments that should stop the approval of existing legal initiatives, it includes FinCEN.
The regulator proposed to apply enhanced identification requirements when making outgoing transactions of more than $ 3,000, and companies should notify FinCEN directly about transactions over $ 10,000. The department also noted that they intend to formalize the rule in such a way that it cannot be circumvented by breaking a large transaction into several smaller parts.
Initially, it was expected that the collection of public comments on the proposal will take place in an accelerated mode and will last only 15 days until January 4. Presumably, in this way the Treasury Department hoped to promote the controversial initiative before the end of Trump’s presidency. Industry participants, however, have strongly protested the proposed changes and the order in which they will be adopted, and FinCEN extended the consultation period to the standard 60 days. In particular, they noted that the requirement would be impossible to comply with, since smart contracts, for example, do not have the identification information requested by the authorities.
“With the help of the community, lawmaking was delayed until the Biden administration. When a new administration takes over, they usually freeze all ongoing initiatives, ”explained Niraj Agrawal, communications director at Coin Center.
“We stood our ground and earned the right to respite and reset,” wrote lawyer Jake Cherwinski. – Treasury Secretary Janet Yellen is not Steven Mnuchin. I look forward with optimism. ”
Yellen recently expressed her own concerns about cryptocurrencies in relation to their potential for use in terrorist financing and money laundering. Nevertheless, Chervinsky considers such a finance minister to be more favorable for the cryptocurrency industry than the previous one:
“Anyone is better than Mnuchin, who long ago decided for himself that he hates everything related to cryptocurrencies. Also, while Yellen may not be a fan, I expect her to be willing to learn and listen and follow the standard process for making regulatory decisions. It’s good”.
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