New rules from FinCEN

[xenon131]

https://dailyhodl.com/2020/12/19/us-treasury-proposes-new-rules-regulating-bitcoin-and-cryptocurrency-transactions/

[Harlot]

Hasn't this been applied before already? I mean I kept seeing this kinds of news before where a customer moves 10,000$ worth of crypto and the financial entity is required to report it so I don't know what has been changed with this rule because it is exactly the same thing the way I see it. It is still the same AML rule we have seen in the past couple of years so really nothing has changed.

[avikz]

https://dailyhodl.com/2020/12/19/us-treasury-proposes-new-rules-regulating-bitcoin-and-cryptocurrency-transactions/

Moving fast to new era.

1) Relevant entities be  obliged   to report directly to FinCEN  all details of transaction involving move of cryptocurrency worth $10000 and more. "That data includes the name and physical address of the customer who sent the cryptocurrency to a private wallet."

2) Relevant financial bodies  be  obliged   to keep logs of transactions worth of $3000  and more.

I believe, US corporate entities like Coinbase and Binance are already obliged to share their client details to the US enforcement agencies on request. It seems now US is trying to make such compliances mandatory for any company functioning on US soil.

This was destined to happen! Anything like bitcoin can't simply go unnoticed by the government, especially when it is providing some exorbitant amount of growth to its investors. So I expected some similar sort of legislation around crypto market.

[zasad@]

How will defi projects work and what data will the company inform if funds are transferred to the smart contract address?
I will not believe that scammers will use the addresses of exchanges for illegal activities.
Under this pretext, you can block any transactions for depositing and withdrawing funds from centralized services.
If these laws are adopted in the United States, then after a while all major exchanges will use these rules.

[sunsilk]

This could be the counterpart of the adoption of institutions. Bitcoin will no longer be the same where we can transact freely without any regulations that we're going to think of or at least for those countries that are affected by this new rules by FinCen.

If these laws are adopted in the United States, then after a while all major exchanges will use these rules.

And all other countries that are crypto-friendly would might do the same.

[20kevin20]

Honestly, I really think exchanges (especially those based in the USA and Europe) have been sharing customer information with agencies & governments for a long time now. It's just that now it's a publicly available information.

I personally wouldn't trust an exchange if they told me they only report txs from $3k and up. If the government is suddenly interested to find some new tax evaders or money launderers, it's pretty easy for them to gather their info.

[zasad@]

This could be the counterpart of the adoption of institutions. Bitcoin will no longer be the same where we can transact freely without any regulations that we're going to think of or at least for those countries that are affected by this new rules by FinCen.

If these laws are adopted in the United States, then after a while all major exchanges will use these rules.

And all other countries that are crypto-friendly would might do the same.

This means we will get a new shadow market.
There are already enough projects that allow you to anonymously tokenize any coins and trade them anonymously.
That is why I left the centralized exchanges, because I understand that in the end, one day I will not be able to withdraw my funds from them.
It's better not to make a little profit than to lose everything

[jseverson]

Hasn't this been applied before already? I mean I kept seeing this kinds of news before where a customer moves 10,000$ worth of crypto and the financial entity is required to report it so I don't know what has been changed with this rule because it is exactly the same thing the way I see it. It is still the same AML rule we have seen in the past couple of years so really nothing has changed.

Yeah, AML measures have always required relevant parties to flag transactions of $5k or more:

Under Treasury's SAR rule, a broker-dealer is required to file a suspicious activity report if: (i) a transaction is conducted or attempted to be conducted by, at, or through a broker-dealer; (ii) the transaction involves or aggregates funds or other assets of at least $5000; and (iii) the broker-dealer knows, suspects, or has reason to suspect that the transaction: (a) involves funds or is intended to disguise funds derived from illegal activity, (b) is designed to evade requirements of the BSA, (c) has no business or apparent lawful purpose, and the broker-dealer knows of no reasonable explanation for the transaction after examining the available facts, or (d) involves the use of the broker-dealer to facilitate criminal activity.

This provision is under the PATRIOT Act so it's likely been in effect for 15+ years, and I'm pretty sure it covers crypto. Maybe the new proposal requires more data to be provided though? Reporting of $3k worth of transactions is also new.

[figmentofmyass]

Hasn't this been applied before already? I mean I kept seeing this kinds of news before where a customer moves 10,000$ worth of crypto and the financial entity is required to report it so I don't know what has been changed with this rule because it is exactly the same thing the way I see it. It is still the same AML rule we have seen in the past couple of years so really nothing has changed.

Yeah, AML measures have always required relevant parties to flag transactions of $5k or more:

Under Treasury's SAR rule, a broker-dealer is required to file a suspicious activity report if: (i) a transaction is conducted or attempted to be conducted by, at, or through a broker-dealer; (ii) the transaction involves or aggregates funds or other assets of at least $5000; and (iii) the broker-dealer knows, suspects, or has reason to suspect that the transaction: (a) involves funds or is intended to disguise funds derived from illegal activity, (b) is designed to evade requirements of the BSA, (c) has no business or apparent lawful purpose, and the broker-dealer knows of no reasonable explanation for the transaction after examining the available facts, or (d) involves the use of the broker-dealer to facilitate criminal activity.

This provision is under the PATRIOT Act so it's likely been in effect for 15+ years, and I'm pretty sure it covers crypto. Maybe the new proposal requires more data to be provided though? Reporting of $3k worth of transactions is also new.

the threshold for cross-border transactions is being lowered to $250:

the proposed decrease in the applicable threshold for international transactions from $3,000 to $250

that is certainly new!

technically nothing has changed yet---these regulations are only "proposed" and we are in a public comment period until january 4th.

it's probably just a technicality though. the bastards only gave 15 days for comments instead of the usual 60 (during christmas!) to make sure they are passed before trump exits office.

[FinneysTrueVision]

This always happens when Bitcoin is seeing new all time highs. Three years ago they went after ICOs to try and make an example out of them and then we saw a big crash soon after. It seems convenient that we are seeing new regulations being proposed again in 2020 to try and stop the momentum we are having.

[sunsilk]

~snip~

This means we will get a new shadow market.
There are already enough projects that allow you to anonymously tokenize any coins and trade them anonymously.
That is why I left the centralized exchanges, because I understand that in the end, one day I will not be able to withdraw my funds from them.
It's better not to make a little profit than to lose everything

Majority who doesn't like this new rules from FinCEN are going to choose the decentralized exchanges even more. There's more security on it and I think we're going to see the news about it being flooded by many users.

Although some exchanges are still okay having their users use the normal accounts without KYC. This is just the start and will spread from one exchange to another and from closed-sourced wallets to self-hosted wallets.