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Biden Freezes Crypto Wallet Rules

On his first day in the White House, President Biden told federal agencies that his appointees would need to review every in-process rule.

President Joe Biden has put a freeze on any “new or pending” Trump-era rules until his administration members are finally able to review them.

It consists of a rule proposed by the Financial Crimes Enforcement Network (FinCEN) last December 18 under former US Treasury Secretary Mnuchin. The bureau’s suggested rule would “require banks and money service businesses (‘MSBs’) to submit reports, keep records, and verify the identity of customers” who made transactions to private cryptocurrency wallets.

Crypto companies and advocacy organizations campaigned for the Treasury to rethink the rule, giving thousands of public comments in a shortened 15-day period. The Treasury tried to urge the regulations before the end of Donald Trump’s term.

Part of the rule’s objectives was to run out the clock and await new handlers.

“Thanks in part to the community’s response, the rulemaking was extended into the Biden administration, when a new administration takes office it’s standard practice to freeze and evaluate ongoing rulemaking,”

Neeraj Agrawal, Communications Director at Coin Center

In a memorandum today from White Chief of Staff Ronald Klain, he asks all agencies to “consider postponing the rules’ effective dates for 60 days from the date of this memorandum, consistent with applicable law…for the purpose of reviewing any questions of fact, law, and policy the rules may raise.”

It also pleads to the agencies to consider allowing a 30-day comment period.

Finally, the memorandum is to ensure that President Biden’s appointees first ponder any in-process rules. Biden has appointed Janet Yellen to take over as Treasury Secretary, whose nomination shall first be approved by the Senate. FinCEN, the Treasury bureau that proposed the rule, is led by Mnuchin-appointee Kenneth Blanco.

Agrawal said that the freeze would give the cryptocurrency industry an even more solid footing when negotiating regulatory issues with the federal government.

“Without the time pressure of a midnight rule we have a much better opportunity to engage thoughtfully with FinCEN,” he said.

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