Personal Privacy Concerns Raised over FinCEN’s Proposed Crypto Rules

The advocacy group in their latest comment has disregarded the proposed regulatory requirements by FinCEN about reporting crypto transactions. 

The U.S. Treasury Department has increased the comment period for people and industry leaders to share their thoughts regarding the proposed crypto rules before they are implemented. 

Coin Center, a crypto policy advocacy group, has made another argument regarding the proposed crypto rules to regulators. The argument was made to FinCEN specifically about the requirement of registered exchanges to verify the identity of their customers using an unhosted or hidden wallet if the transaction of more than $3000 is being made and reporting of all transactions of more than $10,000. 

The advocacy group referred to the proposal as “a grave threat to personal privacy, Fourth Amendment rights against warrantless search, as well as a substantial threat to continued responsible innovation.”

Coin Center claimed that the crypto transactions should not have to follow the same requirements as the bank customers regarding the transfer of more than $10,000 or more. They also claimed that requiring a currency transaction report is fuelling mass surveillance of crime-free transactions. 

“Any transaction over $2,000 that is merely ‘relevant to a possible violation of law or regulation’ will trigger a suspicious activity report (SAR) requirement, which already applies to crypto transactions today,” said Coin Center. “Any CTR report filed without an accompanying SAR is, by definition, a report about an American resident’s entirely innocent and otherwise private financial activities. If FinCEN insists on further extending the gambit of warrantless mass surveillance, then it should by no account do so in a way that prejudices new technologies and the companies and individuals that use them.”

The proposed crypto regulations were first given by FinCEN in December 2020 and ever since the website is open to public commenting. The deadline for commenting has been extended to 29th March 20201 for the public to share their opinions regarding the crypto regulations. 

The advocacy group has been encouraging people to use the comment period to convey their opinions to the regulators and have fully used the opportunity to voice their opinions. The feedback from such groups and the blockchain industry has been one of the reasons for the extension of the comment period. This has also pushed the former administration to rule out the proposed wallet rule and Secretary of Treasury, Janet Yellen, has recently confirmed that.