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US Treasury Reopens Comment Period for New Rules

2 mins
14 January 2021, 20:44 GMT+0000
Updated by James Hydzik
14 January 2021, 20:46 GMT+0000
In Brief
  • The US Treasury Department has lengthened the term for comments on new proposals.
  • The original 15-day comment period was widely criticized.
  • What does this mean for the rules?
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The Financial Crimes Enforcement Network (FinCEN) of the US Treasury Department is extending the comment period for newly proposed rules regarding cryptocurrency wallets.

Extension, extension, extension

The announcement comes after many in the cryptocurrency community derided the Treasury Department for setting an unusually short 15-day period.

The new comment period is extended by 15 days for reporting requirements on transactions greater than $10,000. The department also added 45 days for the ‘identified wallets’ proposal.

So far, respondents to the proposed regulations have submitted over 7,500 comments.

In December, the Treasury Department submitted a set of rules it proposed would tackle cryptocurrency facilitated money-laundering.

The Notice of Proposed Rulemaking (NPRM) includes provisions to force cryptocurrency exchanges to identify recipient wallet addresses before approving withdrawals to “unhosted wallets”.

The proposals also beef up the record-keeping exchanges must carry out in relation to user identification. Predictably, the rules met a harsh reaction from the cryptocurrency community. 

For example, Blockchain Capital partner Ben Davenport wrote an open letter to FinCEN. In it, he pointed out, among other things, the negative effect the rules would have on innovation in the space.

Reacting to the Treasury

The reaction to the extension is the opposite. Jeremy Allaire, co-founder and chief executive officer of payments company Circle, called the extension a “big win for the industry”.

Some in the community even suggest there could be a positive price effect as a result.

These 7,500 comments come from all areas of the cryptocurrency industry, including individual crypto-enthusiasts.

FinCEN says it “appreciates the robust responses already provided” and “looks forward to reviewing any additional information submitted during the extended comment period”.

It went on to say that it wants to continue its active engagement with the cryptocurrency industry. It wants to “ensure innovation with integrity that appropriately addresses anti-money laundering and national security risks”.

What does this mean for the rules?

Going forward, the suggestion is that the Treasury Department recognized the need for careful consideration of rules that would affect key parts of a rapidly developing space.

This could mean closer attention paid to the accessibility of private wallets to the financially worse-off. 

It could also mean the stringent anti-money laundering and know-your-customer processes that cryptocurrency exchanges already have in place could carry some weight in deciding any extra obligations. 

For now, the industry has some breathing space. The work is still not over.


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