This week, the Treasury Departmentâs Financial Crimes Enforcement Network, known as FinCEN, extended by 60 days the comment period for proposed reporting rules on digital wallet transactions that it says would prevent money laundering. First announced on Dec. 23, with a 15-day comment period, the move incited outrage in the crypto community. The regulator has twice relented, noting the ârobustâ engagement that came after what opponents called âmidnight rulemakingâ by Steven Mnuchin, the secretary of the Treasury at the time.
It showed the crypto industry could force a pivot by a powerful agency. They argue that the proposed disclosure and record-keeping requirements are âarbitrary and unjustified,â as Jack Dorsey of Twitter and Square wrote in a comment letter:The incongruity between the treatment of cash and cryptocurrency under FinCENâs proposal will inhibit adoption of cryptocurrency and invade the privacy of individuals. Yet, the rule fails to explain the difference in risk.
The procedural win doesnât guarantee that the new secretary of the Treasury, Janet Yellen, will shift gears on the matter. At her confirmation hearing, she suggested that many cryptocurrency transactions were associated with illicit activity, which Ms. Smith of the Blockchain Association called âa very disappointing reaction.â In written testimony released later, Ms. Yellen offered a more nuanced take, saying regulators should âlook closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities.âThe C.F.T.C.: Act fast
Chris Brummer, a professor at Georgetown Law and a âfintech guru,â is in the running to become the next commissioner of the C.F.T.C. Picked for the same gig in 2016, his nomination was withdrawn by the Trump administration. Since then, Mr. Brummer has testified before Congress on blockchain policy, edited an onlin...