The U.S. Treasury Department has withdrawn two controversial regulatory proposals that closely affected cryptocurrency users. The department announced that the oversight rules previously proposed by the Financial Crimes Enforcement Network (FinCEN) for personal cryptocurrency wallets, known as “unhosted wallets,” and cryptocurrency mixing services will no longer be implemented.
According to information reported by Coin Center, these regulations have drawn criticism from privacy advocates in the crypto sector for years. The first proposal stipulated that financial institutions would assume more comprehensive reporting and record-keeping obligations for certain cryptocurrency transfers made to wallets controlled by users. The other regulation aimed to expand reporting and oversight mechanisms for transactions conducted through cryptocurrency mixer services.
Coin Center argued that if these rules were implemented, government surveillance of cryptocurrency users’ financial transactions could increase significantly. The organization had repeatedly called on the US Treasury Department and FinCEN to withdraw the proposals over the years.
With the US Treasury Department’s decision on October 5, both proposals were officially withdrawn. Coin Center considered this a significant gain in terms of financial privacy, but stated that American users should not be restricted by unnecessary surveillance mechanisms when it comes to using cryptocurrencies directly through their personal wallets.
*This is not investment advice.
