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Ever since the US Federal Reserve and Financial Crimes Enforcement Network opened a proposed rule to acquire more information on smaller international transactions, many cryptocurrency users have labeled the measure as an invasion of privacy.
On October 23, regulatory agencies released a long-standing rule change proposal notice in which financial institutions in the United States are required to exchange client information for all international transactions over $ 3,000. The proposal – which includes “transactions involving convertible virtual currencies and legal tender digital assets” – would lower this monetary threshold to $ 250. To comply with the changes, cryptocurrency exchanges would apparently have to store a large amount of personal information from users.
The Fed opened the proposal for public comment, and many cryptocurrency users were quick to voice their dissent. Some have cited concern that the proposal would prove antithetical to the nature of cryptocurrencies. An anonymous person commented that “the whole point of Bitcoin is to remain decentralized and unregulated – by creating rules, laws and regulations, you are defeating the purpose of its use.”
At least one advocacy group encourages US citizens to speak out against changing the rules. Fight for the Future, a Massachusetts-based digital rights group, today claimed have 3,000 people sending feedback to the Fed and FinCEN to “stop attacking cryptocurrencies and our privacy rights”.
One user cited privacy as a concern, imagining how crypto exchanges would handle the burden of protecting personal data.
“This proposal, if adopted, would prove to be an invasion of privacy,” said Kyle Cribbins from Dallas. “In terms of digital assets, cryptocurrency exchanges are not held accountable in the same way that other financial institutions are and have a track record of poor operational security when it comes to securely storing customer information.”
The claim has some merit. A hacker reportedly stole data from thousands of customers at crypto hardware wallet maker Ledger earlier this year. In May, cryptocurrency service provider BlockFi reported experiencing a data breach that compromised the physical addresses of some wealthy clients.
“At a time when many countries and institutions are pushing for the ultimate end of physical money, it is not at all appropriate to increase the restrictions that make it more difficult for Americans to transact and transfer. [convertible virtual currencies]”Grant Dever said of the proposed rule.” America needs to be a leader in these technologies and increasing the burden on entrepreneurs through this type of restriction is counterproductive and will leave us vulnerable to the technological advances of rival nations. “
Public comments for the FinCEN and Fed rule will close this week.
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