Coinbase CEO Urges Users to Oppose ‘Onerous’ FinCEN Regulation Change

Brian Armstrong, CEO of cryptocurrency exchange Coinbase, has published an open letter encouraging Coinbase users to speak out against changes in crypto regulation recently proposed by the Financial Crimes Enforcement Network (FinCEN).

“The U.S. Department of Treasury is proposing onerous new regulations that will drastically increase the amount of personal information crypto exchanges will have to collect, store and share with the government. We encourage you to voice your concerns directly with the U.S. Department of Treasury by this Monday, January 4, 2021,” said the letter.

FinCEN fast tracks regulations for crypto exchanges

FinCEN, part of the US Treasury Department, has recently proposed new rules that would "require banks and money service businesses ('MSBs') to submit reports, keep records, and verify the identity of customers" who make crypto transactions to unhosted—essentially private—wallets.

The proposal has faced criticism from privacy advocates as well as the Electronic Frontier Foundation for potentially creating privacy risks in the crypto industry.

In his letter, Armstrong voiced similar concerns, calling the proposal “a substantial intrusion into your privacy without good reason—and a significantly more onerous regulation than traditional financial institutions are held to.”

He also noted that the changes are happening unusually quickly this time around. Typically, a proposal of this scale comes “only after a long period of informal discussion with the industry and the public” followed by at least 60 days during which the public can comment on it, Armstrong explained.

He argued that interested parties have had "very little opportunity to discuss our concerns with the Treasury", and have been given just 15 days to share their concerns. “This is not how the process should work,” Armstrong added.

Thus, to draw more public attention to the issue, Coinbase’s CEO said that the exchange sees it as an obligation to “encourage thoughtful comments” on the subject from its customers.

“New regulation should only be made after a thorough and fair process,” Armstrong said, adding, “We view it as our obligation to you, and the entire crypto community, to encourage thoughtful comments and feedback about this proposed new rule which represents a rushed attempt to impose unnecessary new requirements on our industry and customers.”