The Twitter and Square chief executive has given his views on the proposed FinCEN regulations
The influential figure in the crypto space is convinced that implementing the regulations will hurt the crypto sector in the US. He sides with many US crypto firms like Kraken that are against the new anti-money laundering laws that were recently proposed by the Financial Crimes Enforcement Network (FinCEN).
Dorsey also argued that the regulations will likely hamper innovation in the crypto sector. The Square chief penned a letter yesterday criticising the regulations for pushing to enforce reporting requirements that transgress what is necessary for transactions.
“Counterparty name and address collection/reporting should not be required for [virtual currency] currency transaction reporting (CTR) or recordkeeping, as it’s not required for cash today.”
The payment service firm warns that if the proposed regulations are approved, they will force many users to migrate to unregulated crypto services that are outside of the US. It would also restrict the ability of American firms to compete with global players.
“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.”
Kraken shares the same views as Square and, in a statement, the cryptocurrency exchange also voiced its concerns.
“It virtually guarantees that the evidence available to law enforcement today will be placed outside their reach tomorrow. It is quite clearly a politically-motivated piece of midnight rulemaking, the publication of which diminishes the trust we have placed in FinCEN.”
The Financial Crimes Enforcement Network has come under heavy criticism since it published the proposed regulations. Even worse, the network only offered a 15-day window for public comments instead of the normal 60–day window. However, over 6,000 comments were lodged to the financial body. Square’s letter also mentioned that technological limitations will make it difficult to enforce such regulations.
The window for written comments closed yesterday at midnight. Several industry players wrote to the Treasury asking for an extension but hitherto, no arrangements have been discussed.