After the Financial Crimes Enforcement Network (FinCEN) proposed new transaction rules for self-hosted wallets last week, Coinbase is taking issue with the considerably shortened comment period. In a new letter to the regulator, Coinbase is calling for FinCEN to extend to the traditional 60 days.
FinCEN proposed new know-your-customer rules for self-hosted wallets at the close of last week, which would curb anonymous transacting by requiring reports to FinCEN for transactions over $10,000 and imposing record-keeping requirements for withdrawals over $3,000. The proposed rule would also create new rules around "structuring," which would bar users from breaking large transactions into smaller ones to skirt the requirements. The release of the proposal opened up a 15 day comment period, one historically shorter than the usual 60 day timeline.
Dated Dec. 21, a letter addressed to FinCEN director Kenneth Blanco points out that there are few working days left in 2020, and with only 15 days as opposed to the regular 60, FinCEN has departed from its usual standards. Coinbase asked that the regulator "reconsider its haste" since an expedited comment period "is not how effective regulation is made."
"FinCEN asked the public to provide comments in just 15 days, spanning Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s Day, in the middle of a global pandemic — leaving just a handful of actual working days for comments," said the letter.
Coinbase said it had valued a "productive" working relationship with FinCEN in the past but that the current expedited timeline is disappointing.
"We have never seen such a rushed effort for such a significant proposed change in our industry," the letter said.
Of the 24 separate questions industry players can address from the notice, Coinbase said responses would require detailed technical analyses and extensive cost assessments. It also calls for firms to consider the balance of customer privacy since reporting requirements in the proposed rule would mean transmitting customer identity information to the regulator.
"There is no emergency here; there is only an outgoing administration attempting to bypass the required consultation with the public to finalize a rushed rule before their time in office is done," said Coinbase's response.