Outgoing Trump Administration Rushes Damaging New Crypto Bill

Key Takeaways

  • U.S. FinCEN released details of the rumored law for compulsory KYC/AML for self-hosted crypto wallets.
  • According to the proposal, crypto businesses will have to record and KYC all transactions above $3,000, and submit a currency transaction report (CTR) for transactions above $10,000.
  • Experts find the bill impractical and suggest “midnight rulemaking” from the outgoing Trump administration.

Share this article

U.S. regulators finally issued a formal notice for KYC/AML registration of self-hosted crypto wallets, the rumors of which have been doing the rounds since last month. 

While the crypto bill is no different than the existing banking regulations, the speed of its implementation is raising concerns around discriminative treatment. 

Surveillance Bill on Crypto Wallets

On Dec. 18, the Financial Crimes Enforcement Network (FinCEN) proposed new legislation, extending KYC/AML requirements from cryptocurrency businesses to self custody storage. 

These include independent nodes like the BTCPay server and crypto wallets like MetaMask, Electrum, and others. 

The bill titled, “The Financial Crimes Enforcement Network Proposes Rule Aimed at Closing Anti-Money Laundering Regulatory Gaps for Certain Convertible Virtual Currency and Digital Asset Transactions,” focuses on the apparent “gaps” in the reporting of crypto transactions. 

The state agency will be taking public comments on the proposal for the next fifteen days.

The U.S. Treasury Department which heads FinCEN, sees “anonymous” crypto wallets as “loopholes that malign actors may exploit.” 

The current Bank Secrecy Act (BSA) requires banks and other money service businesses, including cryptocurrencies—to record individuals’ names and physical addresses for any transaction above $3,000. 

Further, it requires the exchanges or banks to file a currency transaction report (CTR) for all transactions above $10,000. Steven Mnuchin, the Secretary of the U.S. Treasury,…

Read More