This past week, during the Thanksgiving holiday break most Americans were enjoying, disturbing news hit the cryptocurrency sector from CEO of Coinbase, Brian Armstrong.
Armstrong took to Twitter to announce regulatory changes being rushed through the US Treasury Department which would threaten to cripple the cryptocurrency sector. The main findings of these changes included this single point:
- Self-Hosted wallets would require KYC prior to a regulated exchange sending funds to them
This worries those in the cryptocurrency sector such as Brian because it would add a relatively large barrier to entry for new users seeking to hold and use Cryptocurrency on a wallet they control. It also would require businesses such as COINBASE a huge amount of regulatory strain. Imagine every time you wanted to send BTC to an address, you would first have to contact the owner somehow and have them submit the lengthy KYC documentation and then go through a vetting process o ensure documentation was accurate.
I'm not sure the exact costs of these KYC checks but I would imagine it's one of the largest operating expenses for exchanges today and they currently have have to do it for new customers on their exchange, not every single wallet their network sends cryptocurrency to.
With this in mind, the silver lining to these changes include the fact that they are being submitted by a regulatory agency and not congress in the form of a new law. This means the next administration will easily be able to change the regulations again, if they do end up being changed by the Mnuchin administration.
Read more from this Twitter Thread by Coinbase CEO, Brian Armstrong
Main Photo by Jorge Salvador on Unsplash
