There's a new proposal by the Financial Crimes Enforcement Network (FinCEN), of the US Treasury to require users to register their personal crypto wallets if they wish to use exchanges. You can read the proposal here: https://public-inspection.federalregister.gov/2020-28437.pdf
A death-knell for privacy?
If you read their arguments for the proposed rule, they say that it is necessary to prevent 'terrorist financing, weapons proliferation, sanctions evasion and money laundering'. This is in-line with the existing Bank Secrecy Act and is another step towards integrating crypto with the banking network. I expect to see whales moving their crypto out of exchanges before this new proposal is made a law.
Is this the end for privacy? It surely makes things more onerous and difficult to get around the barrage of KYC, verification and other such processes. That said, it is hard to see how governments will enforce this with decentralized exchanges. If anything, we'll see DEXs flourishing after this rule comes to pass.
A silver-lining?
This sucks for the privacy proponents of crypto. That said, it's not all doom and gloom for everyone else. One of the biggest fears of crypto is that it would be outlawed because of this fear that crypto will be used by the bad guys and that it's not traceable. Silly, I know, but that's what you get when lawmakers aren't familiar with technology.
With this new law, I see crypto assets getting legitimacy in the eyes of lawmakers and will see more institutional flow into crypto, boosting prices as a result.
What do you think?
Is this a bad move by the Treasury or do you think there's good reason for it? Are you going to withdraw your crypto from the exchanges before this ruling comes to pass?
