The Treasury has released its long-awaited proposal to limit money service companies, including US-registered crypto exchanges, from dealing with self-hosted wallets.
On a Friday night Announcement, the Treasury’s Financial Crimes Enforcement Network, or FinCEN, has announced proposed rules requiring registered crypto exchanges to “verify the identity of their clients, if a counterparty uses an unhosted or otherwise secured wallet and the transaction is greater than $ 3,000 “.
The rule is currently just a proposal. The Treasury has given stakeholders 15 days to respond with comments.
Rumors are circulating about the proposed rules for the Last month. With Treasury Secretary Steven Mnuchin heading out as a new government comes in, they are seen as a farewell to crypto. About the announcement he said:
“This rule addresses substantial national security concerns in the CVC market, and aims to close the gaps that malicious actors seek to exploit in the archiving and reporting regime.”
A number of leading lawmakers have already done so come into opposition the proposed rule, seen by many as an attack on the nature of peer-to-peer transactions. However, in the absence of formal law, the Treasury has significant regulatory power in this area.
That said, the current proposal is not as radical as some feared. It would apply previously existing requirements to keep reports on transactions – the Threshold of $ 3,000 of the travel rule – for registered entities interacting with self-hosted wallets. Under registered entities, that threshold would instead be $ 10,000.
This story is breaking and will be updated.