Towards the end of President Trump’s administration, the Financial Crimes Enforcement Network (FinCEN) proposed a stringent regulation that would mandate crypto exchanges to report transactions that were above certain thresholds to the authorities. Not only that, the regulation also requested that these agencies collect personal information of their users.
The proposed regulation elicited negative reactions and responses from crypto enthusiasts who said it would be almost impossible to enact this law because smart contracts in crypto transactions do not collect names or addresses of its users. Some other critics of the regulation like Brian Armstrong of Coinbase were of the opinion that the regulation was going to stifle innovation in the crypto industry and that the regulation was going to lead to the United States being left behind in the crypto industry.
However, a top executive of FinCEN, Michael Mosier, has explained the reason why the regulatory body made this proposition in the first place. According to him, financial institutions report large cash and crypto transactions differently. And since many investors in the crypto industry say assets are like money, then why should “the currency transaction reporting requirement (CTR), apply to cash and banks and money services businesses but not crypto?”
He added that the government is quite concerned about this gap between both systems and it is looking to correct this through the regulation.
FinCEN extends period for public comments
Around December last year, the agency had given a 15 days period for the public to give their comments and opinion about the regulation. But, members of the US congress wrote the body to extend the period by at least 60 days citing the fact that the period was too short.
The agency acceded to the demands of the congress men but granted only a 15 days extension before President Biden forced all agencies to put their regulation propositions on hold for the next 60 days.
The FinCEN executive said that the agency knew that its first window period was too short and that the public was going to require much more time to effectively give their views about the regulation.