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FinCEN Proposed Wallet Rules Gets Downbeat Response On 15 Days Comment Period

The U.S. representatives seem tense against 15 days comment period on 24 separate questions that FinCEN has put forward, for the public, highlighting the new proposed rules against cryptocurrency transactions and reporting measures for exchanges.

Reportedly, eight members of Congress, namely Reps. Tom Emmer, David Schweikert, Warren Davidson, Ted Budd, Bill Foster, Darren Soto, Susan K. DelBene Tulsi Gabbard, including the United States Senator, Tom Cotton have signed and sent a letter to Treasury Secretary Steven T. Mnuchin and cc’ed to Kenneth Blanco, Director, Financial Crimes Enforcement Network, highlighting their concerns over the 15 days and asked the office to consider the extension for 60 days which traditionally happens. Further, asked FinCEN to ruminate the extension for approx. 6 months as this can ease stakeholders to consider and develop the technological solutions and find out ways to implement forthcoming rules.

Earlier in Dec 2020, the U.S. Financial Crimes Enforcement Network (“FinCEN”), Treasury, proposed notice of new rulemaking via 72 pages document, where banks and money service businesses (“MSBs”) are required to follow new KYC rules for self-hosted crypto/digital assets wallets and wallets held at financial institutions. According to the proposed rules, if enacted, banks and MSBs would require to send the reporting to the treasury on transactions related to cryptocurrency/digital asset that is “similar to the existing currency transaction report.

According to the proposed rulemaking, the move is to address the illicit financial threat “created by one segment of the CVC (convertible virtual currency) market and the anticipated growth in LTDAs (legal tender digital assets) based on similar technological principles.” Meaning, to prevent anonymous transactions, FinCEN has proposed crucial points while following the anti-money laundering (AML) standards.

Last year on Dec. 21st, Coinbase also sent a response in a letter to FinCEN referring to Kenneth Blanco, Director, FinCEN expressing concerns over the shortened proposed rulemaking period. Coinbase asked FinCEN to reconsider the haste and provide a 60-days-time period to the public for the comments, on the significant proposed rulemaking.

“FinCEN asked the public to provide comments in just 15 days, spanning Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s Day, in the middle of a global pandemic — leaving just a handful of actual working days for comments. Because we have historically enjoyed and valued a productive working relationship with FinCEN, this recent development is an unfortunate and disappointing departure.”

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