US Treasury Proposes Strict Cryptocurrency KYC Requirements

The US Treasury Department presented new KYC requirements for cryptocurrency users in the country to combat the potential involvement of digital assets in illegal activities. The crypto exchanges are required to verify the identity of the wallet owner if the transaction exceeds $3,000.

According to the official press release by the US Treasury Department, the proposed rule requires cryptocurrency exchanges to submit the information of transactions above $10,000 to the Financial Crimes Enforcement Network (FinCEN).

The Department raised concerns regarding the potential use of digital currencies in terrorist financing and asked financial firms to verify the identity of customers. The US cryptocurrency users trading with an Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term are required to provide details including name, address and purpose of the transaction.

Commenting on the recent proposal, Steven Mnuchin, Secretary of the US Treasury Department, said: “This rule addresses substantial national security concerns in the convertible virtual currency (CVC) market, and aims to close the gaps that malign actors seek to exploit in the recordkeeping and reporting regime. The rule, which applies to financial institutions and is consistent with existing requirements, is intended to protect national security, assist law enforcement and increase transparency while minimizing the impact on responsible innovation.”

Cryptocurrency Surveillance

The crypto community reacted strongly against the recent proposal and expressed concerns about the potential regulation which can impact the growth of digital currencies negatively. Jeremy Allaire, the CEO of Circle said that the proposal is a personal mission of Secretary Mnuchin.

“His own view is far more aggressive than the proposed rule put forward. His original plan was to just drop this as a final rule with zero notice for public comment, as a 'midnight rulemaking' on his way out of office. This actually didn't have broad support, in fact, very few people were even aware of this plan,” Allaire added.

“In the world of crypto assets, a report that includes a Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term address essentially gives law enforcement a data feed that includes identity + blockchain addresses and the ability to monitor, in real-time, all of that customer's flows. This is without any consent,” he tweeted.