The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department, has unveiled its proposed rules on transactions involving cryptocurrency wallets. Experts in the crypto community have weighed in on what the new proposed regulation means, what crypto owners should do, and which wallets are affected.
FinCEN’s New Rules for Crypto Wallets
The U.S. Department of the Treasury announced Friday that the Financial Crimes Enforcement Network (FinCEN) has proposed new rules “aimed at closing anti-money laundering regulatory gaps for certain convertible virtual currency [CVC] and digital asset transactions.” The announcement came several weeks after Treasury Secretary Steven Mnuchin was rumored to be rushing out regulations for self-hosted crypto wallets before Trump’s term expires.
Mnuchin tweeted Friday:
FinCEN is proposing a rule on certain digital currencies that will protect national security, assist law enforcement and increase transparency while minimizing the impact on responsible innovation.
In its proposal, FinCEN explained that it “assesses that there are significant national security imperatives that necessitate an efficient process for proposal and implementation of this rule.”
The bureau of the U.S. Treasury Department added that “U.S. authorities have found that malign actors are increasingly using CVC to facilitate international terrorist financing, weapons proliferation, sanctions evasion, and transnational money laundering,” among other things, including ransomware attacks.
Crypto Experts Break Down the Proposed Wallet Rules
A slew of people in the crypto community have been commenting on the proposed rules on social media. Anderson Kill partner Preston Byrne noted that “FinCEN calls wallets managed by a service like Coinbase’s ‘hosted.’ It does not use the term ‘self-hosted’ but rather the term ‘unhosted’ to refer to bitcoiners’ DIY wallets and your nodes at…