- In his first week in office, President Joe Biden has frozen all Federal regulatory proposals from late in the Trump administration, including a proposal for potential cryptocurrency regulation
- The proposed new laws were frozen to give the Biden administration time to properly review all potential regulatory changes
- Potential crypto regulation was introduced by Treasury Secretary Steven Mnuchin in December 2020 to ramp-up the Know Your Customer (KYC) obligations for financial institutions or services that exchange cryptocurrency
- Essentially, users of these crypto exchanges will need to provide detailed personal information when making large transactions
- While the regulation has been met with backlash from crypto groups, President Biden’s pick for the head of the Treasury, Janet Yellen, has voiced her own concerns that anonymous cryptocurrency is used for criminal activity
- The value of Bitcoin has lost more than a quarter of its value since its January 8 high, worth less than $40,000 per bitcoin this morning
In his first week in office, President Joe Biden has frozen all Federal regulatory proposals from late in the Trump administration, including a proposal for potential cryptocurrency regulation.
The new crypto rules were proposed by Treasury Secretary Steven Mnuchin in December 2020, under which holders of cryptocurrencies like Bitcoin and Ethereum would need to provide personal information for major transactions.
Essentially, the potential regulation would ramp-up the Know Your Customer (KYC) obligations for financial institutions or services where cryptocurrency can be exchanged in large amounts.
Under the laws, users of crypto exchanges who want to move their holdings into private accounts would need to provide detailed personal information when transactions over US$3000 (around A$3900) and report transactions of more than US$10,000 (around A$12,900) to the Financial Crimes Enforcement Network.
The proposed legislation was met with backlash from major crypto groups, with critics claiming the new rules invade the privacy rights of individuals who use crypto.
Nevertheless, the Biden has frozen the proposed regulation and all other Federal regulatory proposes.
According to a White House press release from Biden’s Chief of Staff, Ronald Klain, the regulatory freeze is designed “to ensure the President’s appointees or designees have the opportunity to review any new or pending rules”.
Of course, this freeze does not mean the proposals won’t become law; upon review, the crypto rule changes could still go ahead.
In fact, President Biden’s pick for the head of the Treasury, Janet Yellen, voiced her own concerns that anonymous cryptocurrency is used for criminal activity.
“I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels,” Janet said.
The comments sent the value of Bitcoin spiralling, now having fallen by over a quarter since its January all-time high.
On January 8, one Bitcoin was buying over A$52,000. This morning, Bitcoin was trading at below A$40,000.