The rules proposed by the US Financial Crimes Enforcement Network (FinCEN) in late 2020, which could put a strain on crypto wallets like MetaMask that do not host keys, are on the agenda again.
While the regulation in question is on the 6-month agenda of the US Treasury Department, there are concerns that it will be impossible for these wallets to implement these rules.
According to the proposed regulation, crypto wallets will have to collect and store all personal information of their customers in order to prevent money laundering.
The regulation in question was published by FinCEN in 2020 and requests from the public were gathered.
While it remains unclear how the KYC (know your customer) rules in centralized exchanges will be adapted to the decentralized space, the following statements were included in the plan.
“Requirement to Collect, Store and Transmit Information Regarding Transactions Containing Convertible Virtual Currency and Legal Currency Status Digital Assets:
The Fed System Board of Governors and FinCEN aim to publish a revised proposal to clarify the meaning of “money” used in rules implementing the Bank Secrecy Act, which requires financial institutions to collect, store: transmit information about certain fund transfers and transfers of funds.
The revised proposal is intended to enable it to be applied to domestic and cross-border transactions involving virtual currency that has a currency equivalent value or is a medium of exchange (such as a cryptocurrency). “
Although the proposals for this rule change are among the 6-month plans of the Treasury, we can consider this list as a priority order. Therefore, it does not express a certainty. This agenda is a tool to help us understand the issues the Treasury will be working on in the next 6 months.
Industry advocates said they were concerned that it might be impossible for some wallets to follow the rules, as they are not controlled by humans and therefore not tied to that personal information.
Others are concerned that the requirement may be too burdensome for individuals to comply with.