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Coinbase responds to proposed rulemaking from the U.S. Treasury and FinCEN

By Pavithra R

December 23, 2020

  • Coinbase
  • USA

Coinbase responds to proposed rulemaking from the U.S. Treasury and FinCEN
Paul Grewal, Chief Legal Officer at Coinbase

Coinbase has responded to the recent proposed rulemaking from the U.S. Treasury and FinCEN, that would impose new reporting and recordkeeping requirements for cryptocurrency transactions.

Coinbase has called the development unfortunate and disappointing departure, and has requested the regulator to reconsider the haste and provide the typical 60-day period for such significant proposed rulemaking. According to the firm, FinCEN has asked the public to provide comments in just 15 days, spanning Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s Day, and in the middle of a global pandemic, leaving just a handful of actual working days for comments.

In the notice, FinCEN asks for comments on 24 separate questions. Coinbase’s initial review over the weekend has found that responding to those issues will require the company and many other companies to undertake detailed technical analyses, extensive costs assessments, and complex balancing of privacy interests for the customers whose personal information would now be required to be turned over automatically to a government agency. The firm believes that addressing all of the questions would take much longer than 15 days in the best of times.

Coinbase has even quoted one example whereby FinCEN asks for cost estimates for not just complying with the proposed record keeping and reporting requirements, but also estimates if reporting thresholds changed, coverage expanded to include all crypto transactions, and additional identity verification was mandated.

“Addressing all of the questions FinCEN has posed and the additional issues FinCEN has not yet considered would take much longer than 15 days in the best of times.”

“There is no emergency here; there is only an outgoing administration attempting to bypass the required consultation with the public to finalize a rushed rule before their time in office is done. There is also no justification for treating the cryptocurrency industry so differently from our counterparts in traditional finance.” wrote Paul Grewal, Chief Legal Officer at Coinbase in the company blog.

Founded in 2012, Coinbase’s mission is to create an open financial system for the world. It is a digital currency wallet and platform where merchants and consumers can transact new digital currencies like bitcoin, ethereum, and litecoin.

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