Over the weekend, the U.S. Treasury Department unveiled its long-awaited bill to regulate the cryptocurrency and digital asset industry.
For several weeks now, the United States Treasury Department has been alerting the crypto community about a new regulatory framework for the industry, so in a release recently issued official, presented this long-awaited bill.
Through FinCEN, the agency's Financial Crimes Enforcement Network, the department prepared a bill to regulate the digital industry, and protect the nation and citizens from financial crimes and other illicit activities. According to the department, the new law presented will allow closing the regulatory gaps that currently exist between transactions with cryptocurrencies, and digital assets, and common financial crimes, such as money laundering in the country.
The statement notes that the new law will require exchanges and cryptocurrency and digital asset service companies will be required to submit regular reports on their activities. They will also require identification of citizens who conduct cryptocurrency transactions with unhosted wallets that exceed certain thresholds; exchanges will also be required to keep complete records of such citizens and the transactions they carry out. The law will also apply to all those who carry out transactions with wallets hosted by financial institutions that are located in jurisdictions identified by FinCEN.
The Treasury Department and several U.S. agencies have also been urging citizens not to use unregulated cryptocurrency exchanges or services located in the nation or providing services in the country, in order to minimize the risks associated with illicit practices.
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A repressive and instinctive bill proposal
The bill presented by the organization will have a 15-day period for debate; in addition, the department is accepting applications from interested parties who want to clarify doubts on the matter.
Let us remember that the possible arrival of this bill is something that has been rumored for just over a month and that has caused great concern in the industry due to the negative effects it may have. Brian armstrong, CEO of Coinbase, noted that the Treasury Secretary's intentions, Steven Mnuchin, if this new regulatory framework is approved, it could bring the crypto industry to a complete standstill, by imposing repressive and knee-jerk regulations on the industry and deliberately requiring detailed reporting of transactions that exceed the thresholds imposed by the Travel Rule, that are made to or from any wallet or self-hosted wallet.
It is important to note that for those cryptocurrency exchanges and service companies that interact with self-hosted wallets, the threshold will be $3.000 USD; while for cryptocurrency exchanges and companies regulated in the country, the threshold will be $10.000 USD.
Against the nature of P2P transactions
Like Armstrong, several US legislators have expressed their disagreement with the possible approval of this law, pointing out that it is a regulatory instrument that undermines the nature of peer-to-peer (P2P) transactions and the digital industry in general. In fact, the legislators presented a letter of a request to the Treasury Department where they propose that the entity reconsider the application of this project to self-hosted cryptocurrency wallets, since it would also be an attack on the digital privacy rights of citizens.
The congressmen Warren Davidson, Tom Emmer, Ted Budd y Scott perry They argue that self-hosted cryptocurrency wallets, which allow their users to conduct peer-to-peer transactions with digital assets, without the intervention of a bank or a third party that has to process the transaction, are part of what has brought about the digital industry; therefore, the application of incorrect regulations in this area of the industry will violate the financial privacy of users and send an incorrect message to the world that positions the United States as a nation not favorable to creating businesses or testing new use cases for the technology. blockchain.
“Overregulation of self-hosted wallets will crush a nascent industry and leave the United States behind the rest of the world when it comes to harnessing the power of blockchain and cryptocurrencies.”
New advisors for industry regulations
The Treasury Department has also opened a job offer to hire two expert advisors in the regulation of cryptocurrencies and digital assets, in order to draft and strengthen its regulatory framework for the digital industry. According to the statement, the hiring will be done through FinCEN, which specified that the advisors must have extensive knowledge and experience in cryptocurrencies and digital currencies, in addition to knowledge about the threats and risks of illicit finance related to new emerging technologies.
The advisors will also be required to assist the regulatory body in developing effective policy responses to address and mitigate these challenges in the industry and provide their extensive experience in regulatory technology, finance and digital identity issues to develop new regulations that allow for responsible development of the industry. The advisors will also be responsible for effectively communicating the department's decisions to financial institutions that provide services with cryptocurrencies and digital assets and will collaborate in the management of such policies and regulations.
This hiring process is applauded by many in the crypto community, who point out that if the Treasury Department wants to regulate the digital industry in a truly adequate and effective manner, it must have trained and specialized personnel in the area.
The Organization Blockchain Association He said he is developing strategies to actively educate legislators on digital matters and correct many of the misconceptions that some regulators have about the products and services offered in this industry, especially those related to self-hosted wallets.
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