Coinbase urges the U.S. Treasury to reconsider reporting bulk data in its proposed cryptocurrency commingling rules.
Coinbase said the U.S. Treasury’s proposed rulemaking on cryptocurrency commingling fails to adequately address regulatory gaps while requiring unnecessary amounts of data and resources from cryptocurrency platforms.
in comment In a filing Monday with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), Coinbase proposed that regulated cryptocurrency platforms are already required to implement record-keeping and reporting rules for suspicious activity and illicit cryptocurrency commingling.
Coinbase said the proposed requirement for cryptocurrency platforms to report all cryptocurrency commingling activity, including for legitimate purposes, is not an efficient use of the company’s resources. Also problematic was the lack of financial standards for record keeping and reporting.
Paul Grewal, Coinbase’s chief legal officer, wrote post Without a monetary standard, “you just end up reporting a lot of non-suspicious transactions.”
“Congress said that kind of data dump is a waste of time and resources,” Grewal said.
Coinbase’s comments respond to FinCEN’s response. Proposed Rulemaking In October, we aim to improve transparency around cryptocurrency mixing activities.
“This is the first time FinCEN has used its Section 311 authority to target a class of transactions with a major money laundering problem, and as with our efforts in the traditional financial system, Treasury will work to identify and root out illicit use and abuse. no see. It is part of the CVC ecosystem,” FinCEN Director Andrea Gacki said in October. name.
potential approaches
Many illicit actors, such as North Korean hackers and Russian-based ransomware attackers, have been using cryptocurrency mixers for money laundering activities. FinCEN said in its proposal that such mixing could facilitate money laundering, but acknowledged that cryptocurrency mixing could be used for “legitimate and innovative purposes.”
“If Treasury wants to focus on this issue, it should help exchanges meet their existing obligations to report suspicious activity related to commingling,” Grewal said of X. “This is what Treasury has done elsewhere, and specific guidance is more effective than mandatory mass reporting rules.”
Considering these issues, Coinbase proposed that FinCEN should add a threshold to eliminate bulk reporting of small transactions. Coinbase also recommended requiring record keeping rather than reporting to circumvent privacy and security risks.
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