Crypto wallet oversight shifts again as FinCEN drops proposed reporting and identity checks tied to certain transactions. U.S. regulators have withdrawn a proposal that would have added recordkeeping requirements for certain transactions involving unhosted crypto wallets. FinCEN confirmed it will take no further action on the rule first proposed in December 2020. Under that proposal, transactions above $3,000 would have triggered recordkeeping requirements for banks and money services businesses. FinCEN Withdraws 2020 Unhosted Wallet Proposal The Financial Crimes Enforcement Network (FinCEN) announced the withdrawal in a Federal Register notice scheduled for publication on October 6. The department originally proposed the rule on December 23, 2020, covering certain transactions involving convertible virtual currency or digital assets with legal tender status. Under the proposal, banks and money services businesses would have faced additional obligations when customers transacted with certain wallets. Those rules covered unhosted wallets and some wallets hosted by financial institutions in jurisdictions identified by FinCEN. For transactions exceeding $10,000, banks and MSBs would have needed to file reports containing information about customers and counterparties. Multiple transactions exceeding $10,000 in aggregate within 24 hours would also have fallen under the proposed reporting requirement. Meanwhile, transactions above $3,000 would have required institutions to maintain records about customers, transactions, and counterparties. Banks and MSBs would also have needed to verify their customers’ identities under those circumstances. FinCEN has now confirmed that it will take no further action on the proposal. Trump Administration Cites Digital Asset Regulatory Policy According to FinCEN, the withdrawal forms part of the Trump administration’s approach to digital asset regulation. Officials cited a report from the President’s Working Group on Digital Asset Markets established under Executive Order 14178. FinCEN said the decision supports efforts to make digital asset regulations “fit-for-purpose.” Furthermore, FinCEN also withdrew another proposed rule concerning cryptocurrency mixing transactions. That proposal sought to classify certain convertible virtual currency mixing as transactions of primary concern for money laundering. The department had proposed imposing a special measure under its regulatory authority as part of that action. Both withdrawals followed consideration of public comments received during the respective rulemaking processes. Withdrawal Ends Proposed Unhosted Wallet Requirements Dropping the 2020 proposal means its planned $3,000 recordkeeping threshold will not take effect. Likewise, its proposed reporting requirements for covered transactions exceeding $10,000 will not move forward. However, the withdrawal concerns these proposed requirements rather than eliminating existing Bank Secrecy Act obligations that may apply to regulated financial institutions. For unhosted wallet users, the decision closes a regulatory proposal that had remained unresolved for nearly six years.  The post U.S. Scraps Proposed $3,000 Crypto Wallet Recordkeeping Rule After Nearly Six Years appeared first on Live Bitcoin News.

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