Coin Center says the Proposed FinCEN rule is a threat to personal privacy and innovation

By: Henry Felix

March 16, 2021 3:47 PM

The leading advocacy group for policy issues facing cryptocurrencies has joined in with a comment after the proposed requirements which will mandate U.S-based exchange to verify users using a self-hosted or private wallet.

The U.S Treasury Department extension of the comment window is a result to gather people's thoughts on the proposed crypto rule. Coin Center the non-profit crypto policy advocate organization has made another argument to the regulators.

The FinCEN first suggested the crypto wallet rule in Dec. 2020. and said its website will be open to comments until Jan. 4. The regulators later extended this deadline on Jan. 15 for 14 days until its most recent one as they moved the closing date for comment to March 29 which seems to be the final extension period.

The crypto advocate group directed its recent comments to the Financial Crimes Enforcement Network (FinCEN). Coin Center said the proposed rule would be a grave threat to personal privacy and ideology behind cryptocurrencies as they see it as a serious threat to a sensible innovation.

The proposed rule would warrant U.S crypto exchange to verify the identity of people using an unhosted or covered wallet who has been involved in any transaction worth over $3,000 and report of all crypto transaction that is valued at over $10,000.

By using the extended window for comments, Coin Center said that crypto transactions should not be classified as the same as bank customers moving over $10,000 in cash. The group added that the rule which will require institutions to develop a report on currency transaction for the cryptocurrency is mass surveillance of the innocent transaction.

Coin Center added:
If the Financial Crimes Enforcement Network retains its motion to implement the scheme of warrantless mass surveillance, it should not involve new technologies and individuals and the company's that use them.

The advocacy group has constantly been urging the crypto community to file their comments to the regulators which could be the major reason the comments window was extended pushing the proposed crypto wallet rule into a new administration under recently confirmed Treasury Secretary Janet Yellen.