FinCEN’s Crypto Regulations Frozen by Joe Biden
Joe Biden is the new U.S. President and on his first day, he froze the Federal regulatory process and the controversial self-hosted crypto wallet regulations proposed by former Treasury Secretary Steven Mnuchin. The announcement was made in the White House memorandum for various federal agencies, including the Financial Crimes Enforcement Network (FinCEN).
The order does not include the crypto wallet proposal but freezes all agency rulemaking pending review which will be effective for 60 days commencing from the date of the memorandum. Crypto industry insiders have acclaimed their step with Compound Finance General Council Jake Chervinsky saying,
“We fought hard & earned the right to take a breath & reset. Janet Yellen isn’t Steve Mnuchin. I’m optimistic.”
FinCEN made the self-hosted wallet proposal on December 18 under the former US Treasury Secretary Mnuchin. If the proposal is passed, then banks and money service businesses will have to submit reports, keep records, and verify the customers’ ID to make the transactions to and from their cryptocurrency wallets.
Many of the industry leaders have criticized this proposal including the CEO of financial services firm Square, Jack Dorsey, who said that counterparty name and address collection should not be required for cryptocurrency because it’s not required for cash today.
Critics also exclaimed that it is technically impossible for many projects to obey the proposal as the smart contracts do not contain the name or the address information. Biden chose Janet Yellen to handle the Treasury Secretary, but she has put a dampener on the crypto scene saying that cryptocurrencies are used “mainly for illicit financing.” She has also added to it saying that she may not be all that bad:
“First, anyone is better than Secretary Mnuchin, who decided long ago that he hated everything about crypto. Second, although Dr. Yellen may not be a fan now, I expect she’ll be open to learning & listening, & will follow regular order in deciding on new regulations. That’s good.”
For the Securities and Exchange Commission, Biden chose Gary Gensler, who is more sympathetic to the mission of decentralization when compared to his predecessor.
