Coinbase asks FinCEN to extend public consultations on KYC for self-held wallet users
|- Coinbase asks FinCEN to extend the consultation period.
- The rushed ruling may be harmful to the cryptocurrency industry.
The largest US-based cryptocurrency exchange Coinbase filed an application with the Financial Crimes Enforcement Network (FinCEN) with the request to extend the period of public consultations regarding the potential requirement to introduce KYC for self-custody cryptocurrency wallets.
FXStreet previously reported that Coinbase CEO Brian Armstrong called the proposed measure counter-productive. He explained that the tight regulation would infringe on people's identity and derail innovation, expansion, and its utility on a global scale.
Regulators want to take the industry under control
FinCEN, which is the arm of the United States Treasury, proposed to introduce strict requirements to the outgoing transactions worth over $3,000. Moreover, the financial companies should report on transactions over $10,000 directly to the authority. The regulators are also working on ways to block the attempts to bypass the requirement by making numerous small transactions.
The regulator provided only 15 days for submitting comments. Considering that this period spans over Christmas Eve, Christmas Day, New Year's Eve, and New Year's Day, the industry will actually have just a handful of working days to provide their opinion.
With that in mind, Coinbase forwarded a letter to FinCEN, asking to extend the period from 15 to 60 days.
Because we have historically enjoyed and valued a productive working relationship with FinCEN, this recent development is an unfortunate and disappointing departure. Put another way, this latest NPRM is not how effective regulation is made. We, therefore, ask that FinCEN reconsider its haste and provide the typical 60-day period for such significant proposed rulemaking.
The rushed decision will do more harm than good
The exchange also pointed out that the responses to 24 proposed questions would involve detailed technical and legal analysis. The company's lawyers further explained that the proposed reporting requirements would imply the need to transfer the customers' personal data to the regulator.
To do so in a handful of working days across the national holidays and during the latest surge in COVID is quite obviously impossible. And that impossibility will materially hinder FinCEN's ability to craft a regulation that considers and addresses the concerns of the community it is regulating, as it is required to do, the company added.
Notably, Coinbase believes that there is no emergency with the issue. However, the outgoing administration tries to bypass the required consultation and finalize a new rule in a rush, before their time in office is done.
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