Mr. Mnuchin plans to regulate non-custodial wallets.

[Captain-Cryptory]

.

[jackg]

(accidentally hit the wrong thread).

From the thread he goes on to explain it light just be for exchanges that need to verify who sends and receives funds.

If that happens, I don't see much of a problem. Because you already kinda verified the address was yours in the T&Cs anyway so this is just a further enforcement of that

The UK has some regulation from 2021 that anyone acting as an exchange (p2p or otherwise) might need to register with them to continue trading - which i imagine might be a way to get.AA better grip on who's exchanging and what...

[gentlemand]

If it comes to pass it'll be the US throwing away any lead they may have. As Our Brian points out there are many scenarios where it's simply not possible to do what they're proposing. Americans are already more trouble than they're worth for companies outside. Looks like they're keen to amp that up.

It's not as if everyone is being forced to wear a Bitcoin star of David but it would be nice if they thought these things through properly.

[winrate.io]

Well, if the law passes the govt will need to conduct identity verification on every user that downloads a crypto wallet. This will potentially put the financial privacy of many investors at risk. Could this be the reason why Bitcoin has hit an intraday low of $17,150?

[witcher_sense]

Would you disclose your wallets if such legislation came into force? Which countermeasures can be taken from Bitcoiners part? Any thought on that.

There is arguably only one possible countermeasure that can be undertaken by true bitcoiners: stop using centralized exchanges for buying/selling bitcoin and start engaging in the bitcoin circular economy. The former will definitely help you in achieving the latter because in order to acquire/spend your bitcoin, you would require to interact with other "non-compliant" bitcoiners. Some still fail to grasp, that being a bitcoiner means being a rebel.

[sheenshane]

Honestly, if the legislation will be enforced in our country as well I don't have any idea on how to deal with that not to countermeasure it.  Since anonymity and personal information will be at stake in this plan I should be keen on this regulation and how other Bitcoin holders will respond and react to this.

Would you disclose your wallets if such legislation came into force? Which countermeasures can be taken from Bitcoiners part? Any thought on that.

There is arguably only one possible countermeasure that can be undertaken by true bitcoiners: stop using centralized exchanges for buying/selling bitcoin and start engaging in the bitcoin circular economy. The former will definitely help you in achieving the latter because in order to acquire/spend your bitcoin, you would require to interact with other "non-compliant" bitcoiners. Some still fail to grasp, that being a bitcoiner means being a rebel.

I tend to agree, it could be the immediate response that will countermeasure this and on my end, I might also do the same thing in the meantime when the US government starts to implement their plan to retain my anonymity and secure my finances.

[gentlemand]

If UK citizen creates paper wallets ( the  kind of non-custodial wallets)  and replenish those wallets   with bitcoins to hand them over to   heirs should or must he/she to report this to officials? In fact Mr. Mnuchin would like to make it  a law for U.S. citizens  but I would be reluctant to do this if such a law was in my country.

Nope. But you'd better live seven years after handing them over if it's a sufficiently large amount or it's inheritance taxable just like anything else of value would be.

[zasad@]

Will this become a reality? And if something happens then, an end to confidentiality? "Last week we heard rumors that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term."

Would you disclose your wallets if such legislation came into force? Which countermeasures can be taken from Bitcoiners part? Any thought on that.

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[mindrust]

This is only one step before the 6012.

If you declare your holdings, they will be able to take them away whenever they like.

If you don't, you'll be an outlaw.

[squatter]

This is rather chilling news. I hope Coinbase and other lobbyists have some success in deterring the Treasury Department.

Now we have some context for this rather thoughtful piece published by CoinCenter last week: How I Learned to Stop Worrying and Love Unhosted Wallets

This is only one step before the 6012.

Indeed, that's one of the first things that comes to mind, although I see that as more of an eventuality. If you look closely at what Brian Armstrong is saying, the rumored regulations seem to focus on VASPs and a potential requirement to verify the owner of an address before fulfilling withdrawal or other requests. It's an expansion of KYC into KYCC -- "Know your customer's customer."

That's still far removed from forcing Bitcoin holders to disclose their holdings and public addresses. You're right however, that this is the direction things are likely headed in the future.

[HeRetiK]

Would you disclose your wallets if such legislation came into force? Which countermeasures can be taken from Bitcoiners part? Any thought on that.

There is arguably only one possible countermeasure that can be undertaken by true bitcoiners: stop using centralized exchanges for buying/selling bitcoin and start engaging in the bitcoin circular economy. The former will definitely help you in achieving the latter because in order to acquire/spend your bitcoin, you would require to interact with other "non-compliant" bitcoiners. Some still fail to grasp, that being a bitcoiner means being a rebel.

Probably you missed the point of OP. According to Mr.Mnuchin's plot every one who posses any kind of non-custodial wallets  like desktop, mobile, cold, paper, HW wallets  will be obligated to report about this to officials and identify himself. "stop using centralized exchanges " will not help in this case.

Avoiding centralized exchanges does help if the regulation only affects exchanges, rather than private citizens, which seems to be the case:

This proposed regulation would, we think, require financial institutions like Coinbase to verify the recipient/owner of the self-hosted wallet, collecting identifying information on that party, before a withdrawal could be sent to that self-hosted wallet.

So it seems like they want to tighten down KYC/AML requirements so that exchanges are legally obliged to withhold not only fiat, but also crypto funds. Some exchanges already have been preemptively doing this, but governmental regulation of these requirements looks like very bad news.

The water is slowly boiling and everyone going through centralized exchanges is sitting in the pot.

[HeRetiK]

Avoiding centralized exchanges does help if the regulation only affects exchanges, rather than private citizens, which seems to be the case:

"centralized exchanges " are likely to be included but that regulation, if it comes to action, will focus on self-hosted (non-custodial)  wallets and that was the point of OP. As to  CEX  I completely agree, anyone should avoid, if possible  to use them or use those that don't require KYC. I'm trading and withdrawing   on CEX  with no KYC

To me it seems like they are going to regulate non-custodial wallets via exchanges only though, not by means of requiring everyone who downloads a Bitcoin wallet to register with government officials. At least that's what the rest of the Twitter thread seems to imply, but granted, it's not fully clear at this point. It would be bad news either way though.

[dothebeats]

It's kinda scary in a sense that they are getting even more aggressive on these regulations by the day, thinking that even personal wallets need to be disclosed in order for them to monitor activities of people. Combatting money laundering and other illegal activities through the use of cryptocurrencies is not enough justification for this regulation should it ever come into realization. It's just invasive on the privacy of individual investors not wanting to deal with the stress of filing and whatnot. But then again, all of these is inevitable as bitcoin continues to grow bigger and bigger each day.

[gentlemand]

https://twitter.com/CoinCornerDanny/status/1332307237608501249

Here's an interesting thread about someone who had a similar possibility from the Isle of Man's regulator. He makes the point that when you withdraw cash from an ATM you're not forced to prove anything.

Obviously the US government is a mindless monolith that doesn't give a shit about anything so it may well happen anyway. This guy picked it apart successfully for his jurisdiction but it's a teensy and agile one.

[philipma1957]

https://twitter.com/CoinCornerDanny/status/1332307237608501249

Here's an interesting thread about someone who had a similar possibility from the Isle of Man's regulator. He makes the point that when you withdraw cash from an ATM you're not forced to prove anything.

Obviously the US government is a mindless monolith that doesn't give a shit about anything so it may well happen anyway. This guy picked it apart successfully for his jurisdiction but it's a teensy and agile one.

Last I pulled cash out from atm I used a bank card.

I was forced to prove a lot of kyc to get the bank card.

And when I actually used it in the atm I was forced to enter the correct pin.

KYC is coming like it or not.

[gentlemand]

Last I pulled cash out from atm I used a bank card.

I was forced to prove a lot of kyc to get the bank card.

Yup. But it's just the same for an exchange. You're already KYC'd when you withdraw from it. An extra step like this adds a needless dollop of onerousness. They like those.

[philipma1957]

Last I pulled cash out from atm I used a bank card.

I was forced to prove a lot of kyc to get the bank card.

Yup. But it's just the same for an exchange. You're already KYC'd when you withdraw from it. An extra step like this adds a needless dollop of onerousness. They like those.

May be revoked if put in.

Tax reporting is fucking nuts enough for crypto coins.

[zasad@]

I do not really understand the meaning of this bill.
Let's say I withdraw bitcoins from the exchange address to another address (I can declare that this is my address, that is, I move the cryptocurrency between my wallets).
Legal requirements have been met.
Well, then I can dispose of my funds as I want. I am not obliged to set the owner of the wallet to whom I will send my funds?

[figmentofmyass]

I do not really understand the meaning of this bill.

it's not a bill. it's not legislation being passed by congress. these would be unilateral regulations issued by trump's treasury department, and they're still just rumors at this point.

Let's say I withdraw bitcoins from the exchange address to another address (I can declare that this is my address, that is, I move the cryptocurrency between my wallets).
Legal requirements have been met.
Well, then I can dispose of my funds as I want. I am not obliged to set the owner of the wallet to whom I will send my funds?

from the sound of things, that's as far as these regulations will go, yes.

that's just the centralized exchange angle though. this could affect other use cases like buying goods with bitcoin through a 3rd party like bitpay, or defi contracts supported by centralized parties, etc. it's possible that KYC requirements may become attached to things like that.

[figmentofmyass]

and they're still just rumors at this point.

Nevertheless everyone should be prepared. I have already deleted all wallets from my mobiles. I think this is the weakest point in the stronghold which I have   started to build as the eavesdropping software installed on the cell operators end is likely capable to identify the presence of crypto wallets on my end.

how about encrypting your traffic as an alternative? or are you paranoid about VPN operators too?

i get where you're coming from though. i already avoid mobile wallets because i fly a lot. when i use them, it's just as a throwaway. in fact, i'm trying to get in the habit of only traveling with factory reset devices. they don't need probable cause to search you, and i'd rather not have customs wondering how many figures are in my bitcoin wallet...