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US Senator Urges Treasury Secretary to ‘Make Significant Revisions’ to FinCEN’s Crypto Proposal

U.S. Senator Pat Toomey has urged Cache Secretary Janet Yellen to “make significant revisions” to the proposed crypto regulation by the Financial Crimes Enforcement Network (FinCEN) and the planned adoption of the direction issued by the Financial Action Task Force (FATF).

Senator Asks Janet Yellen to Revise Proposed US Crypto Ruling

U.S. Senator Pat Toomey wrote a letter to Treasury Secretary Janet Yellen Thursday regarding the U.S. approach to cryptocurrency organization. “I write to raise concerns with two proposals involving the Department of the Treasury related to the regulation and oversight of cryptocurrencies,” he began.

The oldest concern relates to FinCEN’s proposed rule for cryptocurrency transactions and the second relates to the FATF guidance on cryptocurrencies and essential asset service providers (VASPs). The senator described:

While I recognize that FinCEN and FATF’s proposals are quest after to address the misuse of cryptocurrencies for illicit activity, if adopted, they would have a detrimental impact on financial technology (fintech), the quintessential privacy of Americans, and efforts to combat illicit activity. I urge you to make significant revisions to them.

The senator spit up the first part of his letter explaining that “Fostering financial innovation is important” for the U.S. He believes that “cryptocurrencies survive to dramatically improve consumers’ privacy, access to financial services, and power to make decisions for themselves.”

Toomey then asserted that FinCEN’s recommended crypto rule “will negatively impact” the U.S., citing two key reasons. Firstly, it would impose “onerous recordkeeping” and reporting provisoes on crypto transactions “that extend beyond existing requirements for U.S. dollar transactions.” Secondly, he argued:

FinCEN’s suggested rule may also prove to be counterproductive in combating illicit activity … By limiting individual privacy and the ability to transact with fiscal institutions, the rule would likely push bad actors to utilize methods that do not interface with financial sanatoria.

“As a result, such cryptocurrency transactions would be less susceptible to appropriate government oversight and detection,” he continued.

The senator then unmistakeable out that some reporting requirements for USD transactions have not been updated for more than 40 years. “Surviving requirements on the U.S. dollar are no longer appropriately tailored to identify illicit activity,” he opined, urging Treasury Secretary Yellen to enquire into whether they are “appropriate for U.S. dollar transactions.” He emphasized that cryptocurrency “can be more easily traceable than acta utilizing U.S. dollars” in some cases.

Turning attention to the FATF guidance, Senator Toomey asserted:

FATF’s rule will drive cryptocurrency transactions away from financial institutions, undermining the ability of law enforcement and analytics hards to identify and track illicit activity. FATF should revise its guidance to focus on transactions and entities that certification regulation.

Concluding his letter to Yellen, the senator said that the U.S. “should support, not inhibit, financial innovation,” adding: “I hustle you to take a more thoughtful approach to identifying illicit activity so financial innovation can flourish and the privacy of Americans abides respected.”

Do you think Treasury Secretary Yellen will heed Senator Toomney’s advice? Let us know in the comments measure out below.

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