Privacy Groups Halts the Spread of FinCEN
Crypto Surveillance The Blockchain Association, Coin Center, EFF, and Fight for the Future unite against a proposed FinCEN rule regulating transactions to crypto wallets.
Because of a paperwork mixup, the deadline to submit public comments on a proposed US treasury rule that will enable another financial surveillance of private cryptocurrency wallets was “quietly extended” until January 7.
As opposed to the proposed rule, four organizations that lead the charge decided to use the extra time to rally the public.
Staff members of the Coin Center, Fight for the Future, Blockchain Association, and Electronic Frontier Foundation have taken part in a Reddit AMA to deliberate their efforts to halt a proposed rule from FinCEN, a bureau of the US Treasury Department that counters money laundering and the use of money for illegal purposes.
FinCEN unveiled last December 18, 2020, FinCEN the new rules that will require cryptocurrency exchanges to record transactions to private wallets worth $3,000 or above and report transactions worth $10,000 or more. The bureau gave 15 days, until January 4, for public comment – a reduced period, in the holiday season, which some lawmakers complained about.
The disorderly and rushed process has been a primary point of controversy. The Blockchain Association executive director, Kirstin Smith, implied that it’s an effort from Treasury Secretary Steven Mnuchin to scrape through the reforms before Trump’s term ends in two weeks.
The Blockchain Association looks to be slowing things down as a response.
The representatives of the organizations also explained what exactly they were against. Many people wanted to know why cryptocurrency exchanges shall be held to another standard than banks, which also have to record and submit transaction records.
“Coin Center does not object to equal treatment with traditional financial institutions,” responded Research Director Peter Van Valkenburgh. “The problem with this rule-making is that it imposes a stricter set of surveillance and reporting obligations for crypto institutions only.”
Joe Thornton of Fight for the Future gave an instance of a bank report being a one-time deal. “What you do with the cash after the fact remains private since cash is anonymous. When the same type of report is made with cryptocurrency, the government has access to your public address, and can then continue to track your activity into the Future, as well as look into your past transactions.”
EFF participants coincided: “The proposal would require businesses to collect far more information than is necessary to achieve the agency’s policy goals, and more information than is collected in other contexts. For example, the proposed regulation would require money services businesses to collect identity information not only about their customers but also about non-customers who transact with their customers.”
Thornton advised Americans and non-Americans to donate to the organization, which helped the staff with its campaigns. EFF called on people to reach their lawmakers – even when they were outside the US.
“If other financial centers don’t want to pursue the same surveillance programs, then there’s pressure on FinCen not to get ahead of the consensus,” EFF Director of Strategy Danny O’Brien stated. “Remember that these are only proposals at this stage, and there’s a lot of co-ordination [sic] behind the scenes before they can become reality.”