More and more people are using cryptocurrencies as an alternative to the predatory fees, government surveillance, and structural inequality created by the traditional financial system. But the Financial Crimes Enforcement Network — also known as FinCEN — has proposed a new rule allowing the US government to keep track of every cryptocurrency transaction you make, no warrant or subpoena necessary. We have until March 29th to stop this dangerous proposal from becoming a permanent regulation.
Tell FinCEN to stop this attack on cryptocurrencies and privacy rights.
What is being proposed?
FinCEN wants to pass a new rule forcing cryptocurrency exchanges to keep records on all cryptocurrency transactions over $3,000 being sent to and from personal wallets (referred to as "unhosted" wallets by FinCEN), and automatically report to FinCEN all transactions over $10,000 sent to and from personal wallets. Disturbingly, this move would require crypto exchanges to collect personally-identifiable information from personal wallet users, which would be like requiring banks to identify people before allowing them to transact with cash. As our lives become “digital first,” FinCEN’s proposal would facilitate extremely intense financial surveillance on an unprecedented scale.
What are the concerns?
Financial data reveals some of our most sensitive personal information, including our personal interests, the causes we support, and our plans for the future. The agencies’ total failure to consider our privacy rights in the proposal’s cost-benefit analysis is outrageous given that the rule would dramatically expand the financial surveillance drag net. And considering that computer systems at the US Treasury were recently hacked, there’s no reason for any of us to believe that FinCEN could responsibly store such a massive amount of sensitive information on millions of people.
Will this new rule stop money laundering and other serious crimes?
In short, no. People who are operating illegal schemes can use their own personal wallets to transfer cryptocurrencies directly to each other, bypassing exchanges like Coinbase, Binance, and Kraken. What’s more, similar laws used to identify fraud and money laundering at traditional financial institutions have backfired, allowing these crimes to flourish at some of the world’s biggest, most heavily-regulated banks. If it hasn’t worked before, why would it work now?
So this new rule won’t affect peer-to-peer transactions or personal wallets?
Actually, it will. Most people purchase cryptocurrency through an exchange before transferring it into a personal wallet. So this rule change effectively imposes strict financial surveillance on people who are participating in the crypto-economy for legitimate purposes, while having little-to-no impact on bad actors.
This whole process has been very confusing. What's really going on here?
FinCEN knows that this rule is unpopular, so they tried to rush it through the approval process over the winter holidays by voiding. the typical comment period, reducing it to 15 days. But in their rush to destroy our financial privacy, they forgot to count properly (no, really!) , misleading the public about the true legal deadline for comment submissions. So then they pushed the deadline back. But when cryptocurrency users and privacy advocates everywhere fought back against the lack of transparency and accountability in the rulemaking process, FinCEN had no choice but to extend the deadline. Now we have until March 29th to submit comments. And to think ... these same people want the power to track every cryptocurrency transaction you've ever made on a public blockchain!