The much-awaited regulations around crypto wallets that would extend AML regulations to non-custodial wallets were finally released by the Financial Crimes Enforcement Agency (FinCEN) called “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets.”
The new set of rules would require any virtual Asset Service Providers (VASPs) such as exchanges and custodians to record the name and address of the owners of the wallet for any transactions above $3,000 and a full-fledged currency transaction report in cases whetre the tranaction amount exceeds $10,000.
The newly proposed regulations were not received with open arms by the crypto community but many believed the proposed regulations by FinCen could have been worst. Jake Chervinsky, a lawyer by profession took to Twitter to explain the proposals of the bill and deemed it “awful.” However, he believed that this is just the beginning and regulations would come around as the adoption grows.
1/ After a long wait, FinCEN has finally issued its new proposed rule extending AML regulation to non-custodial wallets.
It could've been worse (really), but it's still a terrible rule in both process & substance.
Here's what it says, what's wrong with it, & what we do next ????
— Jake Chervinsky (@jchervinsky) December 19, 2020
US Treasury Offers 15-Day Public Comment Time Frame, But Technically Blocks Them From Making Any!
The newly proposed FinCen rules have a very short 15-day time frame allocated for public comment to administrative rules, however, there’s a “technical” catch or loophole that would devoid the public from making any comments at all. The policy read
“…because this proposal involves a foreign affairs function of the United States and because ‘notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”
When enquired about the reasons behind such a short time-frame and the technical blocking the public from any comments, the regulatory body cited ‘significant national security imperatives’. FinCEN elaborated that they have already taken necessary feedback from the stakeholders of the blockchain community justifying their reason behind such an accelerated time frame.
A series of government policies and regulations towards crypto proposed in the past quarter seems more regressive be it the new STABLE Act bill, or the new FATF travel guidelines, the government seems to be quite determined to ensure that the rise of cryptocurrencies does not interfere with their sovereignty to issue money.