FinCEN Further Extends Comment Period for Controversial Crypto Rules

The industry now has 60 days to provide feedback on the proposal.

AccessTimeIconJan 26, 2021 at 2:19 p.m. UTC
Updated Sep 14, 2021 at 11:01 a.m. UTC
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The Financial Crimes Enforcement Network (FinCEN) is further extending a comment period for a controversial proposed rule that would require crypto exchanges to gather and store counterparty information for transactions to unhosted wallets.

FinCEN announced the move Tuesday, saying all comments are due 60 days after the change is submitted to the Federal Register, the U.S. government's logbook. The move is a victory for the crypto industry, which has complained the previous deadline of 15 days was far too short. FinCEN previously extended the comment period by 15 days for a proposed currency transaction report rule and 45 days for the counterparty data collection rule.

The rule was proposed at the end of 2020 and would have placed an undue burden on exchanges to collect the names and addresses for individuals who own unhosted or private wallets. The industry pushed back on the proposal, claiming it might break decentralized finance applications and create a data honeypot that would put personal information at risk.

The currency transaction report aspect would require exchanges to file reports for transactions that are worth over $10,000 per day. This rule would be identical to existing bank requirements for fiat transactions, though there are questions about whether wallet addresses would be included in these reports.

The counterparty rule would be more difficult to comply with.

"All comments to the NPRM will now be due 60 days from the date of publication of this Extension Notice in the Federal Register," Tuesday's notice said.

Treasury Secretary Janet Yellen was confirmed Monday evening by the U.S. Senate. The FinCEN proposal was one issue she was asked about prior to the vote.

“I am aware of the rules proposed by FinCEN in December 2020 regarding how certain digital assets are treated under the Bank Secrecy Act,” she said in a written response. “I agree on the need to ensure adequate consultation with and input from stakeholders. If confirmed, I intend to ensure a full and substantive review of the proposals, which will include an assessment of how to ensure proper input from stakeholders.”

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