In late November, Coinbase chief executive Brian Armstrong warned that the U.S. Treasury was looking to crack down on “self-hosted” cryptocurrency wallets.
Armstrong suggested that from what he has heard, the Treasury was going to mandate exchanges to take the information of users looking to withdraw capital to a self-hosted wallet.
Minutes ago, the Financial Crimes Enforcement Network (FinCEN) branch of the Treasury confirmed that is working on a rule along these lines. A document outlining the proposed rule suggests that exchanges and other virtual asset service providers will need to verify the name and address of non-custodial wallet users for any transaction exceeding $3,000.
The document alleges that “convertible virtual currencies” are becoming more prevalent in facilitating “international terrorist financing, weapons proliferation, sanctions evasion, and transactional money laundering.” A cryptocurrency-focused report from the Department of Justice was cited.
FinCEN will be taking public comment on this proposed rule until January 4th.
This will give firms in the cryptocurrency space and the broader public a chance to push back against the law if deemed necessary.
This publishing of this proposed rule comes just hours after Cynthia Lummis, an incoming U.S. senator, said that she has spoken with Treasury Secretary Mnuchin as she opposes the proposed rule.