BA Urges Treasury to Extend Comment Period for Proposed “Unhosted Wallets” Regulation
Today, the Blockchain Association submitted a comment letter urging the Department of Treasury (Treasury) to extend the comment period for its notice of proposed rulemaking (NPRM) entitled “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets.” In addition to the comment letter, the Association’s counsel, former Solicitor General Paul Clement, sent a letter to Secretary Mnuchin requesting a deadline extension.
In its comment, the Association argues both that the NPRM is procedurally defective and that Treasury should extend the comment period for the NPRM to at least 60 days so that the public can provide substantive and meaningful feedback. Treasury gave the public an extremely truncated comment period of 12 days, including federal holidays, to submit comments on the rule’s novel requirements and the 24 questions listed in the NPRM.
On the proposed rule itself, the Association’s response focuses on four distinct flaws: (1) the rule would be an unprecedented and untested expansion of the Bank Secrecy Act (BSA) to include collection of individual counterparty information, (2) money services businesses (MSBs) may be unable to comply with the proposed rule, (3) the proposed rule implicates important privacy rights and does not account for risks to Americans’ data security, and (4) the proposed rule would stymie innovation.
This rule does little if anything to advance FinCEN’s laudable goals of targeting money laundering, terrorism financing, and other illicit uses of CVCs or digital assets. In order to ensure that both stakeholders and regulators can give these weighty matters the full and fair attention they deserve, the comment period ought to be extended to at least 60 days. The Association and other members of the cryptocurrency community are eager to work with FinCEN and Treasury on this rule and, more generally, to help craft policies that accomplish the government’s important regulatory objectives without unnecessarily curbing innovation or treading on individuals’ property and privacy rights.