The US Department of the Treasury will consider requiring cryptocurrency platforms to provide information about clients transferring assets to non-custodial wallets.
According to a US Treasury document, the KYC (know your customer) requirement for non-custodial wallets may be addressed in the current semi-annual agenda, which will be published in the Federal Register on January 31. The agenda sets out the priorities of the Ministry of Finance, but this does not mean that the rules will necessarily be implemented or that they will be implemented in the proposed form.
“FinCEN is proposing to amend the rules implementing the Bank Secrecy Act (BSA) to require banks and financial services companies (MSBs) to report, maintain records and verify customer identities in relation to transactions involving convertible virtual currency ( CVC) or legal tender (LTDA) digital assets held in non-custodial wallets or in wallets hosted in a FinCEN-defined jurisdiction.
The timeline in the section suggests that FinCEN aims to finalize the rules by the end of August. The rule was first proposed in late 2020 by the U.S. Financial Crimes Enforcement Network (FinCEN). If the rule is passed, cryptocurrency exchanges will be required to collect names and home addresses, among other personal data, from all clients who transfer assets to a personal wallet.
The opinions of participants in the cryptocurrency industry are divided. Part was concerned that some wallets might not comply with the rules because they do not belong to their owners and are not tied to personal information about the user. Others were concerned that the requirement might be too onerous for individuals.
In March 2021, the non-profit civil rights organization New Civil Liberties Alliance (NCLA) stated that FinCEN’s rules for regulating cryptocurrency wallets are against the US Constitution. In early 2021, Twitter co-founder and Square CEO Jack Dorsey called FinCEN’s new cryptocurrency wallet regulations detrimental to the industry. In 2020, cryptocurrency exchange Coinbase asked the US Department of the Treasury to extend the discussion period for proposed regulation of non-custodial wallets.
