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  • US Treasury shifts focus to unhosted wallets in fight against money laundering.
  • Outspoken Bitcoin advocate Senator Lummis expresses concerns over lack of transperancy.  

In an announcement on Friday, the US Department of Treasury’s Financial Crimes Enforcement Network proposed a new rule that would allow it to monitor cryptocurrency transactions using self-hosted wallets. The statement read as follows:

Under the Notice of Proposed Rulemaking (NPRM) submitted to the Federal Register today, banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.

Commenting on the proposal, US Treasury Secretary Mnuchin explained that the new rule addresses substantial national security concerns in the CVC market and aims to stop “malign actors” from exploiting the recordkeeping and reporting regime.

Lummis asks Congress to get involved

Senator-elect Cynthia Lummis, who voiced her support for cryptocurrencies by arguing that Bitcoin is a great store of value that could be used to tackle the US national debt, shared her views on this development in a Twitter thread.

Lummis made it clear that she is deeply concerned with the proposed. Wyoming’s first female Senator called upon the Treasury to kickstart a transparent process that involves Congress and industry leaders while arguing that a rule without broad consensus would hurt the US against China and Russia in the battle for the future of finance. 

“A hallmark feature of digital assets, like Bitcoin, is the ability to conduct transactions without an intermediary,” Lummis further noted. “This promotes financial inclusion and freedom. A rule adopted at this juncture would be a solution in search of a problem. More pressing Bank Secrecy Act (BSA)-related issues exist.”

Warren Davidson, Congressman serving Ohio’s 8th District, backed Lummis’ stance and said those charged with securing America’s financial future should not fear the light of public debate.