President Biden has frozen all in-process rules including the Financial Crimes Enforcement Network (FinCEN) proposal affecting crypto wallet
Crypto users will be breathing a sigh of relief following President Biden’s move to halt all agency rulemaking on his first day in office. The controversial proposal regarding unhosted crypto wallets is among those put on hold by Biden pending review. The freeze will stay active until Biden’s appointees review the affected rules.
The White House handed out a memorandum detailing the announcement to freeze all in-process rules. The edict didn’t particularly mention the FinCEN proposal but outlined that all agency rulemaking will be halted for the next 60 days pending review.
Crypto users who had vehemently opposed the rule will be relieved that tides may take a turn to favour them. Jake Chervinsky, general counsel of Compound Finance, lauded the move. He shared the news on Twitter saying, “President Biden has frozen all agency rulemaking pending further review. This includes former Secretary Mnuchin’s proposal on ‘unhosted wallets’. We fought hard & earned the right to take a breath & reset. Janet Yellen isn’t Steve Mnuchin. I’m optimistic“.
The proposal was published on December 18, with only an initial 15-day window for commenting on it. Crypto users were displeased by the rules spelt in the proposal and the unconventional short comment period. With the stay, crypto industry players will be hoping they get proper engagement with the Treasury Department on the proposal.
The apple of discord in the bureau’s proposed wallet rules is the section that requires “banks and money service businesses (‘MSBs’) to submit reports, keep records, and verify the identity of [crypto] customers” completing transactions to private addresses. Several influential figures found fault in the wallet proposal and lambasted the FinCEN Treasury bureau. Among them is Jack Dorsey, a renowned Bitcoin advocate and CEO of payment service company Square.
Although Mnuchin-appointee Kenneth Blanco chairs the FinCEN bureau, Treasury Secretary nominee Janet Yellen input will be key in determining the outcome if she is approved by the Senate. Her stance on the subject will largely define the direction the proposal takes. While crypto players remain optimistic, it is worth noting that Yellen is not exactly a crypto enthusiast.