19. September 2021

Cryptomode users talk about proposed change to FinCEN travel rule

„This proposal, if adopted, would be an invasion of privacy“.

Since the U.S. Federal Reserve and the Financial Crimes Enforcement Network (FinCEN) opened for public comment a proposed rule to acquire more information about smaller international transactions, many users of cryptomacs have labeled the measure an invasion of privacy.

On October 23, regulatory agencies published a notice of a proposal to modify a long-standing rule requiring financial institutions in the U.S. to exchange customer information for all international transactions over $3,000. The proposal – which includes „transactions involving virtual convertible currencies and digital assets that are legal tender“ – would reduce this monetary threshold to US$250. To comply with the changes, the crypto-currency exchanges would apparently need to store a large amount of users‘ personal information.

The Fed opened the proposal for public comment, and many cryptomime users were quick to express their disagreement. Some cited concerns that the proposal was antithetical to the nature of cryptomime. One anonymous commented that „Bitcoin’s goal is to remain decentralized and unregulated – by creating rules, laws, and regulations, you are thwarting the purpose of its use.

At least one advocacy group is encouraging US citizens to speak out against changing the rules. Fight for the Future, a Massachusetts-based digital rights group, said on Monday it had 3,000 people commenting on the Fed and FinCEN using its website to „stop attacking cryptomorphs and our privacy rights.

One user cited privacy as a concern, wondering how cryptomote exchanges would handle the burden of protecting personal data.

„This proposal, if adopted, would prove to be an invasion of privacy,“ said Kyle Cribbins of Dallas. „In terms of digital assets, cryptomote exchanges are not liable in the same way as other financial institutions and have a poor track record of operational security with regard to the secure storage of customer information.

The statement has some merit. A hacker would have stolen data from thousands of customers of the Ledger cryptomime hardware portfolio manufacturer earlier this year. In May, cryptomede provider BlockFi reported a data breach that compromised the physical addresses of some wealthy customers.

„At a time when many countries and institutions are pressing for a definitive end to physical money, it is not at all appropriate to increase the restrictions that make it more difficult for Americans to transact and transfer [virtual convertible currencies],“ Grant Dever said of the proposed rule. „America needs to be a leader in these technologies and increasing the burden on business people through this kind of restriction is counterproductive and will leave us vulnerable to the technological advances of rival nations.

Public comments on the FinCEN and Fed rule will close this week.