The U.S. Treasury Department’s FinCEN office recently proposed that banks and financial services companies record transactions made to private crypto wallets. The office suggests that these laws will help combat illegal activity in the cryptocurrency industry.
The speculations were confirmed
The Treasury Department proposed new cryptocurrency wallet regulations after weeks of speculation that the agency was working to introduce stricter regulations in the sector. FinCEN today released a new proposed regulation that will require banks and financial services companies to report, keep records and verify the identity of clients who carry out crypto transactions to private wallets.
The new regulations will be submitted to the public by January 4, 2021. In addition to recording transactions, these rules will classify digital assets and virtual currencies as monetary instruments. In this way, cryptocurrencies will be covered by the Banking Secrecy Act (BSA).
New regulations will stop illegal activity
Under the new rules, all transactions with a value in excess of $ 10,000 must be reported to FinCEN within 24 hours. In addition, customer identity verification is required. Some transactions may require an even lower threshold of $ 3,000. This way, KYC will automatically apply to private crypto wallets.
According to FinCEN, the new rules will help to stop illegal financing with cryptocurrencies. More and more operating entities use crypto to avoid sanctions, money laundering, arms trading, terrorist financing, trafficking in personal data, counterfeit goods, drugs and toxic chemicals.
In particular, the authority highlighted the use of more anonymous coins such as Monero. FinCEN suggests that while the new rules are awaiting public comment, they will not apply to the proposal. This is because the application is related to foreign affairs. As a result, the public procedure becomes unnecessary, impractical and even contrary to the public interest.
Some time ago we reported that the Fed and FinCEN want to classify cryptocurrencies as money. This would give the regulator more control over the currency. Worldwide digital currencies have all the features required to be recognized as money. They are divisible, they constitute a reliable store of value and a medium of exchange.