The plans exposed a few days ago by the US agency against financial crimes (FinCEN) with a regulation proposal that mainly affects self-custody cryptocurrency wallets, continue to generate criticism.
In this case, Kraken and Coinbase make public their questions about the project that would force cryptocurrency exchanges to verify the identity of customers, keep records and submit reports.
Among other observations, they reject the period granted to send opinions , stipulated in 15 days, with an expiration date for next January 4. They consider that this period is insufficient to evaluate the new rule, especially since it includes the Christmas holidays and occurs in the middle of the COVID-19 pandemic.
In a statement posted on its blog , the Kraken team said it will fight to stop the approval of this rule and invites the public to submit comments . However, it notes that a sufficient time frame has not been established to give a meaningful answer.
Coinbase, for its part, through its legal director, Paul Grewal, sent an open letter to the director of FinCEN, Kenneth Blanco, and expressed its disagreement with the proposal . He requested that a normal period of 60 days be established to respond, which is usually the common one in the traditional financial industry. “There is no emergency here. There is also no justification ”, he added.
The government almost always gives us at least 30 days to do it, and often 60 days or even more for important matters. Instead, in order to get through this rule with minimal public participation, FinCEN provides only 15 days during the holiday season for the public to consider the consequences of the rule (…) This is unprecedented and clearly inappropriate for a deviation so dramatic of existing law.
He notes that FinCEN’s arguments, warning of national security dangers, have been under consideration since 2019. Consequently, there is no explanation of how an emergency suddenly arose years later, “just as the current administration is ready to step down ”.
In the notice, FinCEN asks for comments on 24 different questions (more than three pages of the notice only). According to our initial review, responding to those issues will require Coinbase and many other companies to conduct detailed technical analysis, comprehensive cost assessments, and a complex balance of privacy interests for clients whose personal information should now be automatically released to an agency governmental.
The exchange claims FinCEN has made no attempt to estimate the cost of the proposed rules , leaving that work entirely to the industry in this 15-day comment period.
“Addressing all the questions would take much longer than that time (…) To do so in a few business days during national holidays and during the latest COVID surge is obviously impossible,” Coinbase notes.