A proposed rule by FinCEN would require exchange account holders to provide KYC information for their digital wallets.
Users of cryptocurrency exchanges in the United States may soon be obligated to hold digital wallets that comply with KYC (know-your-customer) requirements, according to a recently published advanced notice of proposed rulemaking by the US Financial Crimes Enforcement Network (FinCEN.)
The proposed rule would require users of centralized cryptocurrency exchanges who wish to send Cryptocurrencies from their exchange accounts into private digital wallets may be forced to provide personal information about the owner of the wallet.
According to FinCEN’s proposal, the proposed rule would only apply if users want to send amounts greater than $10,000 in a single day. However, the rule could later be applied to users who send smaller amounts.
Additionally, the proposal would require exchanges to store and submit records of individual transactions worth more than $10,000 or groups of transactions that add up to $10K in a single day. Exchanges may also be required to keep detailed records of transactions over $3,000 that include the personal data of the sender and receiver.
“It’s Clearly an Attack on Users’ Privacy."
According to a report by CoinDesk, the proposal (if passed) would increase the amount of work that is required by individuals and exchanges to undertake in order to transfer cryptocurrencies. This may bring the cryptocurrency world in line with the traditional banking system, a factor that may give institutional investors a greater level of comfort to enter the space.
Larry Cermak, Director of Research at The Block, wrote on Twitter that the proposal would allow FinCEN to “build a massive database of wallet owners without relying on the always probabilistic data from Chainalysis.”
“Now the government has guaranteed wallet owners and can start piecing together the dataset with certainty,” he explained.
“It’s clearly an attack on users’ privacy though and isn’t compatible at all with DeFi and other protocols that you can’t KYC,” Cermak continued. “What I imagine will start happening is one [transaction] to KYC’d wallet and then one [transaction] to Tornado Cash or [another] mixer to break the link. Until that gets banned too.”
“They Will Continue Trying to Find Ways to Gum up the Gears, One Rule after Another, until [Crypto] Is as Inefficient as Regular Banking,”
Matt Ahlborg, Data Scientist and Founder of crypto data site UsefulTulips.org, also wrote on Twitter that the proposal is “the first of likely a series of rules incoming which will add friction to the bitcoin experience.”
“They will continue trying to find ways to gum up the gears, one rule after another until it is as inefficient as regular banking,” he said.
Indeed, while the rule may seem fairly insignificant at first glance, it could have serious consequences for Bitcoin markets. Zac Prince, Chief Executive of crypto lending company, BlockFi, recently told Finance Magnates that the possibility of “overbearing Regulation from major world governments” could reverse the course of Bitcoin’s current bull cycle.
Public commentary on the proposal will be accepted until January 4th, 2021. However, FinCEN writes that “although FinCEN is publishing this proposal in the Federal Record and invites public comment, FinCEN has noted that notice-and-comment rulemaking requirements are inapplicable because this proposal involves a foreign affairs function of the United States and because ‘notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.’
Users of cryptocurrency exchanges in the United States may soon be obligated to hold digital wallets that comply with KYC (know-your-customer) requirements, according to a recently published advanced notice of proposed rulemaking by the US Financial Crimes Enforcement Network (FinCEN.)
The proposed rule would require users of centralized cryptocurrency exchanges who wish to send Cryptocurrencies from their exchange accounts into private digital wallets may be forced to provide personal information about the owner of the wallet.
According to FinCEN’s proposal, the proposed rule would only apply if users want to send amounts greater than $10,000 in a single day. However, the rule could later be applied to users who send smaller amounts.
Additionally, the proposal would require exchanges to store and submit records of individual transactions worth more than $10,000 or groups of transactions that add up to $10K in a single day. Exchanges may also be required to keep detailed records of transactions over $3,000 that include the personal data of the sender and receiver.
“It’s Clearly an Attack on Users’ Privacy."
According to a report by CoinDesk, the proposal (if passed) would increase the amount of work that is required by individuals and exchanges to undertake in order to transfer cryptocurrencies. This may bring the cryptocurrency world in line with the traditional banking system, a factor that may give institutional investors a greater level of comfort to enter the space.
Larry Cermak, Director of Research at The Block, wrote on Twitter that the proposal would allow FinCEN to “build a massive database of wallet owners without relying on the always probabilistic data from Chainalysis.”
“Now the government has guaranteed wallet owners and can start piecing together the dataset with certainty,” he explained.
“It’s clearly an attack on users’ privacy though and isn’t compatible at all with DeFi and other protocols that you can’t KYC,” Cermak continued. “What I imagine will start happening is one [transaction] to KYC’d wallet and then one [transaction] to Tornado Cash or [another] mixer to break the link. Until that gets banned too.”
“They Will Continue Trying to Find Ways to Gum up the Gears, One Rule after Another, until [Crypto] Is as Inefficient as Regular Banking,”
Matt Ahlborg, Data Scientist and Founder of crypto data site UsefulTulips.org, also wrote on Twitter that the proposal is “the first of likely a series of rules incoming which will add friction to the bitcoin experience.”
“They will continue trying to find ways to gum up the gears, one rule after another until it is as inefficient as regular banking,” he said.
Indeed, while the rule may seem fairly insignificant at first glance, it could have serious consequences for Bitcoin markets. Zac Prince, Chief Executive of crypto lending company, BlockFi, recently told Finance Magnates that the possibility of “overbearing Regulation from major world governments” could reverse the course of Bitcoin’s current bull cycle.
Public commentary on the proposal will be accepted until January 4th, 2021. However, FinCEN writes that “although FinCEN is publishing this proposal in the Federal Record and invites public comment, FinCEN has noted that notice-and-comment rulemaking requirements are inapplicable because this proposal involves a foreign affairs function of the United States and because ‘notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.’
Rachel is a self-taught crypto geek and a passionate writer. She believes in the power that the written word has to educate, connect and empower individuals to make positive and powerful financial choices. She is the Podcast Host and a Cryptocurrency Editor at Finance Magnates.
Revolut's Former Exec Launches $6.5M Crypto Exchange
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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