FinCEN Extends Crypto Rulemaking Review Period as Senate Confirms Janet Yellen
The Financial Crimes Enforcement Network (FinCEN) has issued a notice extending the comment period for its crypto wallet proposal. The extension came shortly after the U.S. Senate confirmed Janet Yellen as the new U.S. Treasury Secretary.
FinCEN Extends Comment Period for Crypto Wallet Rulemaking
FinCEN, a bureau of the U.S. Department of the Treasury, announced Tuesday that it has submitted for publication in the Federal Register an extension notice affecting crypto regulation. The announcement came shortly after the U.S. Senate confirmed Janet Yellen as the new Treasury Secretary.
The Tuesday notice “will lengthen the reopened comment period and set one deadline for all comments addressing its Notice of Proposed Rulemaking (NPRM) regarding certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA),” FinCEN detailed, adding:
Today’s extension notice allows additional time to respond to all aspects of the proposed rule, and sets one closing date for the comment period. All comments to the NPRM will now be due 60 days from the date of publication of this extension notice in the Federal Register.
The bureau explained that under the proposal, banks and money services businesses (MSBs) “would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds” involving unhosted cryptocurrency wallets or crypto wallets “hosted by a financial institution in certain jurisdictions identified by FinCEN.”
Earlier this month, FinCEN issued a notice reopening the comment period for the above-proposed rulemaking. It provided an additional 15 days for comments on the proposed reporting requirements for crypto transactions “greater than $10,000, or aggregating to greater than $10,000, that involve unhosted wallets or wallets hosted in a jurisdiction identified by FinCEN.”
Furthermore, FinCEN “provided for an additional 45 days for comments on the proposed requirements that banks and MSBs report certain information regarding counterparties to transactions by their hosted wallet customers, and on the NPRM’s proposed recordkeeping requirements.”
The crypto community welcomes the extension announcement. The Chamber of Digital Commerce wrote: “FinCEN is extending and consolidating its NPRM on CVC and LTDA transactions, now due Mar. 29, 2021. This is a huge win for [the] industry.” Coin Center Executive Director Jerry Brito commented: “FinCEN has extended the comment period on its crypto rulemaking by another 60 days. Glad to see a normal process taking shape.” He opined:
I am extremely optimistic it will have none of the problematic counterparty identification requirements that were the real issue.
During a Senate hearing last week, Yellen made some controversial statements about cryptocurrency, stating that they are mainly used for illicit financing. However, she subsequently clarified her position and promised to work with other federal regulators to implement an “effective” regulatory framework for cryptocurrencies.
The Senate’s 84-15 vote on Monday made Yellen, a former chair of the Federal Reserve, the first woman to lead the Treasury Department. Yellen is expected to play a key role in gaining congressional approval for President Joe Biden’s $1.9 trillion coronavirus relief stimulus package. The stimulus proposal came just months after the federal government closed out fiscal 2020 with a deficit exceeding $3 trillion.
