Coinbase penned a letter to Kenneth Blanco, FinCEN’s director, in which the firm urged the regulator to reconsider their drastic proposal and extend the comment period to 60 days.
FinCEN had allotted a mere 15 days to discuss what many consider to be an existential threat to the crypto industry.
FinCEN Rushes Crypto Regulations
The FinCEN proposal plans to add new KYC rules to self-hosted crypto wallets. A self-hosted wallet is a wallet that is not in the custody of a centralized authority.
For example, an individual holding Bitcoin (BTC) in a Ledger or Trezor hardware wallet classifies it as a self-hosted wallet.
FinCEN’s proposal will eradicate users’ anonymity as centralized exchanges would need to report any transactions over $10,000 (in a span of 24 hours) to FinCEN. They will also have to keep records for withdrawals over $3,000.
FinCEN has asked companies to comment on 24 questions. Coinbase has stated that providing all the details in 15 days is not feasible, especially in the midst of a global pandemic during the holiday break.
Coinbase stated that the response to these questions would require detailed analysis and extensive costs.
“There is no emergency here. Here is only an outgoing administration attempting to bypass the required consultation with the public to finalize a rushed rule before their time in office is done. There is also no justification for treating the cryptocurrency industry so differently from our counterparts in traditional finance,” the article read.
FinCEN is one part of the United States Department of the Treasury. At present, Steven Mnuchin is the Secretary of the Treasury. However, with the Biden administration entering the White House in January, Mnuchin’s term is coming to an end.
His imminent departure could have a drastic impact on FinCEN’s currently proposed wallet rule.
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