Under the proposal, crypto exchanges will be mandated to store personal information of every customer that move funds to their personal wallets. Now the Chamber of Digital Commerce calls this a shocking invasion of privacy, but the implications could have bigger impact than that. Let’s learn more. Joining me today is founder and president of the Chamber of Digital Commerce — this is the world’s leading trade organization for digital assets and the blockchain industry — Perianne Boring. Welcome to the show.
Perianne Boring: Thanks so much, Angie. This is such an important issue. [I’m] looking forward to chatting with you about this.
Lau: Absolutely. Get us up to speed. Why did FinCEN decide to come up with the proposal in the first place?
Boring: This is something that was actually being spearheaded by the former secretary of the Treasury, Steve Mnuchin. And there were geopolitical as well as political motivations behind these proposed rules. As you know, Steve Mnuchin served as part of the Trump administration, who is no longer in office. It is very typical when you have one administration leaving and another one coming in to have midnight rulemakings, and this was a part of that. What I believe is that Secretary Mnuchin, or former Secretary Mnuchin, wanted to leave a legacy as he was leaving office as hard on crypto. There were also rumors of some geopolitical forces that played a role in this as well. Bitcoin, in particular, has really soared in terms of acceptance and use, and you’re seeing huge growth in the overall crypto economy, but also bitcoin. The rumor is that there’s many other nations around the world that see this as a threat to their sovereign currencies. I do not think that is the right way for governments to assess bitcoin’s role in the financial system. But the idea is that there was pressure from the international community to clamp down on bitcoin and this was one way they were going about that.
Secretary Mnuchin was driving this through the public policy process and ultimately he was not able to get this done at the 11th hour, something we were very proud to be able to help play a role in stopping because, like you said, it wouldn’t actually accomplish what it was set out to do. And two, it would have major unintended consequences for an incredibly important, nascent and emerging ecosystem.
Lau: When you rush anything through — be it government policy to doing your fifth-grade homework — there’s just going to be a lot of things that fall through the cracks. Time is often, one of the insurance, I guess, of making sure that every T is crossed and I’s dotted and that there’s full understanding of the concept before moving forward. So do you think that it’s a good sign that FinCEN has extended the consideration time period to the end of March?
Boring: Oh yeah, absolutely.
Lau: Speaking in February, it’s another month and a half.
Boring: Yes. To kind of go back through what actually happened here, Secretary or former Secretary Mnuchin was not going to have any comment period at all. Mind you, this is an incredibly comprehensive set of rules — 70-plus pages of new regulations that would impact every single money service, business and bank that has virtual currency transactions going through their system. They wanted to publish it as an interim final rule, meaning no comment period. And the day it’s published, it would be law.
When we understood that was the intention, we put considerable amount of pressure on the Secretary of Treasury’s office to not do that. Because one, that’s not the right way to bring something like this forward, and two, any time there’s going to be comprehensive new rules on a nascent industry, it’s incredibly important that the industry itself, the experts, the technologists, the lawyers, the legal community has the opportunity to work with government to get it right. That is part of the point of a…