FinCEN’s crypto wallet regulations frozen by President Biden

TL;DR Breakdown

  • Joe Biden orders all federal agencies to suspend all regulatory processes.
  • FinCEN had earlier proposed that all crypto wallets enforce KYC rules.
  • Members of the crypto community show support for the new President’s order.

United States President, Joe Biden, has ordered all federal agencies to suspend all regulatory processes for the next 60 days. This announcement was made in a White House memorandum that was shared with all of these agencies.

According to this memorandum, all proposed regulations, which include that of the controversial self-hosted crypto wallet regulations initiated by the former Secretary of Treasury, Steven Mnuchin, would be suspended.

The regulation had generated negative reviews earlier

It would be recalled that the Financial Crimes Enforcement Network (FinCEN) had proposed a set of crypto regulations that would make crypto wallets enforce Know-Your-Customer (KYC) rules.

The KYC rule will ensure that institutions like banks and crypto wallets start keeping records of transactions that their clients might be involved in. The authorities believe this would help these institutions have an improved anti-money laundering standard.

However, members of the crypto community had kicked against this proposition, saying that it is against the privacy principle on which cryptocurrencies are built. The founder of Twitter and Square, Jack Dorsey, had said that name and address collection was not necessary for crypto assets, the same way it is not needed for cash today.

Critics of the regulation also said it would be almost impossible for projects to comply with the regulation. They cited the fact that many of these smart contracts usually do not contain names of addresses.

Crypto community hails Biden’s order

Members of the crypto community have also given positive remarks to the new American PresidentPresident’s order. According to Jake Chervinsky of Compound, expressing some optimism and saying that “Janet Yellen isn’t Steve Mnuchin.”

The decision to suspend all of these regulations could suggest that the new US president would be rescinding some unfavorable decisions that might have been enacted by the previous administration.

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