A new law regarding the privacy of self-hosted wallets, blockchain nodes, and crypto exchange transactions is coming in a matter of days.
It’s been a few weeks since rumors of speculative regulations have had crypto traders and CEOs alike worried.
At first, many predicted that bank involvement as an intermediary on the blockchain may be the next regulatory step. However, it was Brian Armstrong, the CEO of Coinbase that got a sense of what’s really coming. Specifically, he worried about crypto wallets being regulated and he was right.
The new law may include KYC/AML requirements for self-hosted wallets as well as blockchain nodes (computers that communicate on the coin’s network.)
According to this report, the law would also affect money services businesses (MSBs) that coordinate with self-hosted wallets. This, of course, includes cryptocurrency exchanges. In essence, cryptocurrency exchanges would have to send a currency transaction report (CTR) to the Treasury Department.
The threshold for inclusion in these reports is also under debate. The current limit for reporting money sent out of the country is $3,000. However, FinCEN (Financial Crimes and Enforcement Network) and the Federal Reserve are discussing changing this limit to $250.
While the reason for these new regulations aims to stop criminal activity according to the departments involved, it is a devastating blow for the crypto world.
The coming regulations have received tremendous criticism from people within crypto. Congress has also expressed concerns, calling the regulations an “impractical burden.”
An intermediary rule may go into effect as soon as today even before public comments for the legislation are held.