U.S. crypto exchanges have begun battling recent Treasury proposals that will force the country’s trading platforms to report certain transactions to a government-designated agency.
Of course, this initiative immediately sparked backlash from industry representatives such as the Blockchain Association.
The Treasury is committed to enforcing the same Financial Crime Enforcement Network (known as FinCEN) rules that currently require traditional financial institutions to report all transactions in excess of a certain amount of money. Currently, 15 days are allocated for discussion of the proposal, so crypto exchanges have already made public objections.
Kraken has expressed its opposition to the Treasury Department, and the company’s chief attorney, Marco Suntory, tweeted that the proposal goes beyond simply twisting the hands of platforms to file currency transaction reports.
He noted that, in fact, the Treasury is proposing “a rule that requires customers to provide the name and the postal address of the recipient of digital currency. In the absence of a block of information, the company must abort the transaction.”
“The implications of this rule are clear: rich people cannot send money to the poor. It will also prohibit transferring virtual currency using smart contracts that are consciously designed to eliminate intermediaries that keep poor people out of our financial system.”
In this regard, Suntory accused the state structure of behind-the-scenes tactics:
“Recognizing this, FinCEN is trying to implement this proposed rule into legislation for the holidays, hoping that no one will notice. And if we do this, we are given only 15 days to respond. Kraken will resist this. And you should too.”
In a blog post, the exchange added that the move “will shield tomorrow’s financial system from poor people.”
Competing exchange Coinbase took a different path, asking for more time to prepare a response to the Treasury.
“FinCEN solicited comments just 15 days in advance, on Christmas Eve and New Year’s Eve, in the midst of the pandemic, leaving a few business days for comment,” Coinbase head of the legal department Paul Grewal commented.
The expert said that Coinbase or its competitors are deprived of time to prepare a balanced answer to the “24 separate questions”:
“This is not how effective regulation is done. We ask FinCEN to reconsider its hurry and provide a standard 60-day period for this significant ground-breaking decision– nothing more, nothing less.”
