Coinbase criticizes the U.S. Treasury’s proposed cryptocurrency mixing rules, arguing that they fail to address regulatory gaps and demand excessive data from crypto platforms.
Coinbase urges the U.S. Treasury to reconsider proposed crypto mixing rules, specifically in bulk data reporting
In its comprehensive filing to FinCEN, Coinbase raises significant concerns regarding the U.S. Treasury Department’s proposed rules. The company underscores that regulated platforms are already in compliance with the existing reporting regulations for suspicious activities within the cryptocurrency space. Coinbase argues that the proposed mandate to report all crypto mixing activities, without considering their legitimacy, is not only inefficient but also burdensome for crypto platforms.
One of the prominent criticisms highlighted by Coinbase is the absence of a monetary threshold in the proposed rules. This absence, according to Coinbase, could lead to the unnecessary and impractical bulk reporting of numerous non-suspicious transactions. Such a scenario, Coinbase contends, would run counter to congressional guidance that advocates for the judicious and effective utilization of resources.
Numerous illicit entities, including North Korean hackers and Russian ransomware attackers, exploit crypto mixers for money laundering. While FinCEN acknowledges the legitimate uses of crypto mixing, it proposed rules to combat potential money laundering risks. Coinbase suggests that instead of mandatory bulk reporting, Treasury should assist exchanges in meeting their current obligations to report suspicious activities related to mixing. Coinbase advocates for setting a threshold to avoid bulk reporting of small transactions and recommends focusing on recordkeeping, rather than reporting, to address privacy and security concerns.