Today marks the ending day of the 15 day consultation period offered by the U.S. Financial Crimes Enforcement Network (FinCEN) regarding comments from the public concerning a proposal on crypto regulations. The Electronic Frontier Foundation (EFF) from their side submitted their comments opposing the proposal on stringent crypto regulations. According to the non-profit, the proposed regulation is a move towards expanding the financial surveillance system towards individuals.
On December 18th, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) released a proposed regulation that would require companies to provide personal data of customers who use self-hosted wallets for cryptocurrency transactions.
As per the agency, it is trying to solve the issue of illicit finance. Although, others suggest that the proposed rule is a violation of individual privacy.
The proposed rule requires money service businesses (MSBs) such as cryptocurrency exchanges to collect identity data not just of their own customers but anyone who transacts with their customers using their own cryptocurrency wallets.
The proposed rule would also require regulated businesses to keep records of crypto transactions over $3,000 while reporting on crypto transactions over $10,000 to the government.
FinCEN’s rationale for the proposed regulation includes malign actors increasingly using cryptocurrencies for facilitating international terrorist financing, evading sanctions, and transnational money laundering. In addition, FinCEN also alleges that virtual currencies are also used to buy and sell controlled substances, stolen and fraudulent IDs, counterfeit goods, toxic chemicals, and malware.
According to the EFF, FinCEN has not provided enough time to consider all of these risks properly. For instance, the comments from the public on the proposal was scheduled over the winter holiday. That itself did not allow many members of the public and experts to provide the necessary feedback on the consequences of the regulation.
Hence, the EFF has urged the regulatory agency to not implement the proposal but instead meet directly with those affected by the regulation. This includes innovators, technology users, and civil liberties advocates.
The non-profit has further asked the agency to extend the comment period to a minimum of 60 days with an additional time for comments after any adjustments are made to the proposed regulation.