Coin Center, a non-profit organization, sees a significant threat to innovation due to FinCEN’s proposals to regulate the cryptocurrency market.
March 16, 2021 | AtoZ Markets – The proposed by the Financial Crimes Agency (FinCEN) measures to regulate the cryptocurrency market pose a “significant threat” to innovation. This opinion was expressed in an official statement by the head of the research department of the Coin Center Peter van Valkenburg.
According to the organization, the measures proposed by FinCEN to identify crypto wallets are impossible and “unacceptable for reasons of confidentiality.”
“The requirement for counterparty identification and reporting for transactions in the amount of $ 3000 <…> is a serious threat to personal confidentiality,” Valkenburg wrote.
The Coin Center called for the removal of the obligation to monitor all cryptocurrency transactions if regulations are adopted.
FinCEN violates constitutional rights
The organization notes that even banks in the United States do not have strict requirements for identifying counterparties. Keeping records in the presence of smart contracts in the blockchain ecosystem is simply impossible, according to the Coin Center.
In addition, Valkenburg emphasizes that any form of counterparty accounting would be a major extension of an already “substantial baseless oversight regime”.
“This [compliance with FinCEN requirements] will lead to complications at the constitutional level,” he said.
As a reminder, back in December 2020, FinCEN proposed to introduce full verification of crypto wallets. So, in the case of withdrawal of money in the amount of more than $3000, it is proposed to apply advanced verification methods. Transactions in excess of $10,000 will need to be reported to FinCEN altogether.
Moreover, FinCEN also announced their intention to take control of the initiators of the breakdown of large transactions into small ones in order to evade supervision. The American cryptocurrency exchange Coinbase has already said that the proposed regulation may have “unforeseen side effects.”
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