Home » Crypto » Companies rally against the proposed AML laws from FinCEN – Jack Dorsey warns that users will look outside of the US if passed

Companies rally against the proposed AML laws from FinCEN – Jack Dorsey warns that users will look outside of the US if passed

January 5, 2021

Quick take

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Jack Dorsey wrote a letter earlier this week which discusses the proposal for seeking to impose reporting obligations that go “far beyond what is required for trashcan trashy cash transactions“.

This is all in relation to many crypto companies based in the United States going against the FinCEN that would force companies to gather information on the identities of non-customer counterparties.

Jack Dorsey, the chief executive officer at Twitter and the financial services company known as Square wrote a letter on the 4th of January earlier this week which discusses the proposal for seeking to impose reporting obligations that go “far beyond what is required for trashcan trashy cash transactions“.

This is all in relation to many big crypto-related companies based in the United States going against the proposed regulations from FinCEN that would force companies that operate with crypto assets to gather information on the identities of non-customer counterparties.

In the letter, he said:

“Counterparty name and address collection/reporting should not be required for [virtual currency] CTRs or recordkeeping, as it’s not required for cash today.”

If these regulations become a law, it would drive uses of cryptocurrency towards unregulated and non-custodial crypto services that would be based outside of the United States.

He added:

“By adding hurdles that push more transactions away from regulated entities like Square into non-custodial wallets and foreign jurisdictions, FinCEN will actually have less visibility into the universe of cryptocurrency transactions than it has today.”

For this proposed regulation change, FinCEN has received a wave of criticism from the community. The regulator has only offered 15 days rather than 60 for public comments after publishing the initial proposal last month on the 18th of December. 6000 odd comments have been submitted to the entity since.

Kraken, one of the biggest crypto platforms in the US has been one to criticise the proposal as well, understandably.

They slammed the entity for failing to provide estimates for the cost of integrating such a rule. They added:

“It is quite clearly a politically-motivated piece of midnight rulemaking, the publication of which diminishes the trust we have placed in FinCEN.”

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