US Crypto Proposal Meets Resistance from Congress

Share Article
In Brief
  • Nine US congresspeople formally requested that the Treasury Department slow down its new crypto regulation process.

  • Respondants were given 15 days instead of the usual 60 days to comment.

  • The regulations will bring the US in line with global regulation on wallets and transactions.

  • promo

    Want to learn how to trade? Get a beginners guide from _BeInCrypto Academy_ now!

The Trust Project is an international consortium of news organizations building standards of transparency.

A bipartisan group of nine US congresspeople sent a letter to Treasury Secretary Steven Mnuchin calling for longer time frames for proposed crypto wallet legislation.



The letter, posted by the pro-crypto NGO coincenter.org, shows that the letter was signed by representatives of both parties and Senator Tom Cotton. This is an unusual display of unity from America’s lawmakers at this time.

A Matter of Legitimacy

The bipartisan group requested that the Treasury Department extend the comments period on proposed regulation touching on crypto. The current period is 15 days. With the holidays, there are only eight working days.



The group asks for an extension to at least 60 days, which is closer to Treasury’s norm. The group also claims that the rushed process calls into question the legitimacy of the proposed ruling. 

The lawmakers also called on the Treasury Department to postpone implementation of the rule by a half year. Crypto market operators need this time to implement the technology and processes that will keep them compliant. 

A Matter of Crypto

The proposal under question comes from Treasury’s Financial Crimes Enforcement Network (FinCEN). It was released on Dec 18. FinCEN will require Virtual Asset Service Providers (VASPs) to increase know-your-customer (KYC) information regarding privately owned wallets.

If there are no changes, VASPs would need to send the information to the Treasury Department if the transaction exceeds $10,000. However, the VASP needs to collect and hold the data if the amount transferred exceeds $3,000.

What’s more, under other new legislation that FinCEN proposed, VASPs need to report cross-border transfers of over $250. This is down from the current $3000.

Whose Bright Idea?

FinCEN is not acting on its own accord by presenting these proposals. Rather, the main idea behind them is to bring the US in line with the rest of the world.

Globally, the Financial Action Task Force (FATF) tries to align anti-money laundering legislation across governments. In 2019, FATF pointed to FinCEN that American legislation was falling behind other countries. Washington needed to remedy this by mid-2020.

Convergence With Fiat, Divergence With Practice

The Treasury Department intends to bring the crypto environment in line with existing banking regulations. The limits set in the proposal are similar to those called the travel rule, for cross-border transactions, in fiat banking.

However, the rushed manner in which it is doing so makes some observers wonder about the bureaucracy’s motivations. Some, like Forbes contributor Yaya Fanusie, point to Treasury Secretary Steven Mnuchin’s personal distaste for bitcoin. 

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Share Article

James Hydzik is a finance and technology writer and editor based in Kyiv, Ukraine. He is especially interested in the development of regulation in the face of increasingly rapid technological change. He previously covered the CEE region for Financial Times banking and FDI magazines. An ardent believer in gut renovating eastern Europe one flat at a time, he currently holds more home renovation gear than crypto.

Follow Author

Daily signals, Bitcoin analytics and traders chat. Join our Telegram today!

Let’s Go

A step-by-step guide how to trade Bitcoin profitably

Learn now