Coinbase proposes extending discussion of wallet-owner verification proposals

The largest American cryptocurrency exchange Coinbase has filed a request with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury to extend the period for public comments regarding proposals for verifying users of non-custodial wallets from 15 days to the standard 60 days.

Last Friday, FinCEN released a 72-page notice of proposed rulemaking that could have long-lasting, detrimental side effects on the crypto ecosystem. The agency is allowing 15 days for comments. We disagree with this for many reasons. https://t.co/8aAgxxP6aF

— Coinbase (@coinbase) December 22, 2020

FinCEN proposes applying to outgoing transactions of $3,000 or more. For transactions over $10,000, companies would be required to notify the regulator directly. The regulator intends to ensure that the rule cannot be circumvented by splitting a single transaction into multiple smaller parts.

In a December 21 letter addressed to FinCEN Director Kenneth Blanco, Coinbase lawyers urged reconsideration of its approach to this issue, which they described as “disappointing” given the previously “productive” working relationship with FinCEN.

“The 15-day deadline covers Christmas and New Year and the pre-holiday days in the midst of a global pandemic, leaving only a few actual working days for comments. We have never seen such rushed efforts for such a significant change in our industry,” the letter says.

In Coinbase’s statement, it notes that responses to 24 questions covered by the proposal will require detailed technical analysis and extensive cost assessments. The firm’s lawyers also urged weighing the balance of customer privacy, as the proposed reporting requirements would entail the disclosure of users’ identities to the regulator.

“There is no emergency. We see only the approaching end of the administration’s term, which is attempting to bypass the necessary public consultations,” Coinbase says.

Earlier in November, Circle CEO Jeremy Allaire, in his letter to the Treasury, called for cooperation with blockchain-industry representatives in developing regulatory requirements.

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