US Lawmakers Tell Mnuchin to Back Off From Potential Crypto Wallet Regs

Reps. Warren Davidson, Tom Emmer, Ted Budd and Scott Perry urged Steven Mnuchin to rethink his rumored self-hosted wallet regulations in an open letter Wednesday that warned such rules might "crush a nascent industry."

Dec 10, 2020 at 12:20 a.m. UTC
Updated Sep 14, 2021 at 10:41 a.m. UTC

Four U.S. lawmakers want Treasury Secretary Steven Mnuchin to rethink his rumored crypto wallet regulations.

Reps. Warren Davidson (R-Ohio), Tom Emmer (R-Minn.), Ted Budd (R-N.C.) and Scott Perry (R-Penn.) sent a letter to Mnuchin on Wednesday, "expressing our concern" about rumored self-hosted wallet regulations Mnuchin apparently intends to implement in the coming weeks.

Coinbase CEO Brian Armstrong tweeted last month that Mnuchin was "planning to rush out" these new regulations, which would apparently require crypto exchanges to verify know-your-customer (KYC) data for self-hosted wallets before they could send cryptocurrencies off of their platforms and into the wallets.

According to Wednesday's letter, this potential regulation would "hinder American leadership," preclude U.S. actors from participating in the space and "undermine the Treasury Department from stopping illicit actors from exploiting the financial system."

Requiring exchanges to maintain this much KYC data could also threaten user privacy, the lawmakers wrote. Rather, the U.S. should have "regulatory parity" between the traditional financial system and the crypto ecosystem.

Implementing regulations around self-hosted wallets might have the unintended effect of turning anyone who currently uses one into a criminal, the letter added.

In a statement published online, Davidson said that "before Treasury issues midnight rules on the regulation of self-hosted wallets, Secretary Mnuchin should come to the Peoples’ House and speak to representatives about what his regulations would do."

"Over-regulating self-hosted wallets will crush a nascent industry and leave the United States behind the rest of the world when it comes to harnessing the power of blockchain and cryptocurrency," he added.

This is the second letter most of these lawmakers sent Wednesday; earlier in the day, Emmer led a letter sent to Securities and Exchange Commission Chairman Jay Clayton, asking the securities regulator to create some clear guidance on crypto custody and direct the Financial Industry Regulatory Authority to approve broker-dealers from the space.

Clayton intends to step down from his role at the end of 2020.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
Argo Blockchain Q1 Net Income Plunges 90% to $2.1M

Bitcoin was priced in the $40,000 range for much of Q1 compared with nearly $60,000 in the same period a year earlier.

Bitcoin was priced in the $40,000 range for much of Q1 compared with nearly $60,000 in the same period a year earlier.

2
Nearly 5,505 Ether, or $10M of the $625M Ronin Exploit, Are on the Move

Over 5,505 ether connected to the Ronin exploiter address seem to be on the move via privacy exchange Tornado Cash, blockchain data shows.

Over 5,505 ether connected to the Ronin exploiter address seem to be on the move via privacy exchange Tornado Cash, blockchain data shows.

3
First Mover Asia: USDC Hasn’t ‘Flippened’ USDT, but Trader Preferences Are Changing; Cryptos Rise Despite Bearishness

A Glassnode analyst suggests the collapse of the UST token has triggered a change in investors' stablecoin preferences; bitcoin holds above $30,000.

A Glassnode analyst suggests the collapse of the UST token has triggered a change in investors' stablecoin preferences; bitcoin holds above $30,000.

4
Musk Sets New Condition for Twitter, Citi Says Terra’s Fallout Unlikely to Hit Wider Financial System

The most valuable crypto stories for Tuesday, May 17, 2022.

The most valuable crypto stories for Tuesday, May 17, 2022.