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Joe Biden Freezes FinCEN’s Crypto Wallet Rulemaking — US Crypto Regulations Under Review

Joe Biden Freezes FinCEN's Crypto Wallet Rulemaking — US Crypto Regulations Under Review

New U.S. President Joe Biden has frozen all agency
rulemaking, including the proposal by the Financial Crimes
Enforcement Network (FinCEN) relating to cryptocurrency wallets.
Biden will appoint someone to “review any new or pending
rules,” the White House has announced.

FinCEN’s Crypto Wallet Proposal Frozen, Pending Regulatory Review

Joe Biden, the 46th president of the United States, has frozen
all rulemaking carried over from the previous administration, the
White House announced after his inauguration Wednesday. This would
include the
proposal
by the Financial Crimes Enforcement Network (FinCEN)
affecting cryptocurrency wallets. The freeze is “In order to
ensure that the president’s appointees or designees have the
opportunity to review any new or pending rules.”

The announcement elaborates:

With respect to rules that … have not taken effect, consider
postponing the rules’ effective dates for 60 days from the date
of this memorandum.

“For rules postponed in this manner, during the 60-day period
… consider opening a 30-day comment period to allow interested
parties to provide comments about issues,” it adds, noting that
the delay could be extended if necessary.

The crypto community welcomes this regulatory freeze news.
Lawyer Jake Chervinsky, who played a critical role in spearheading
the crypto community to submit comments to FinCEN, tweeted:

President Biden has frozen all agency rulemaking pending further
review. This includes former Secretary Mnuchin’s proposal on
‘unhosted wallets.’

The lawyer added: “We fought hard & earned the right to
take a breath & reset. Janet Yellen isn’t Steve Mnuchin.
I’m optimistic.” Biden has picked
Yellen
to become the new Treasury Secretary. The former Federal
Reserve chair is not a fan of bitcoin or cryptocurrencies herself,
stating during a recent Senate hearing that cryptocurrencies are
mostly used for illicit financing.

Besides FinCEN’s rulemaking on cryptocurrency wallets, Biden
has inherited a few other crypto regulatory issues from the Trump
administration relating to the Office of the Comptroller of the
Currency (OCC). Former OCC chief Brian Brooks had
warned
that some of the positive crypto regulations he approved
may be rolled back during the Biden administration. They include
allowing banks to provide crypto
custody
services and use
public blockchains
and stablecoins.

“Blockchain, cryptocurrency, and decentralized finance are
doing to banks what email did to the post office. Our job is to
rethink the role of banks,” Brooks highlighted in an article he
authored on The Hill last week. “Because of their investment in
technology, banks will be key nodes that validate transactions on
decentralized ledgers, and will transmit and receive tokens across
blockchains like they process digital payments today,” he opined.
“Banks will also provide advice, custody, and structured
products. Banks could also reprise their 19th century role of
issuing Treasury notes and issue digital coins backed by
dollars.” He additionally noted:

Cryptocurrency and decentralized finance present several
benefits … If the United States focuses on the risks and not the
benefits, we will fall behind as the global financial system is
rewired.

Among the benefits, Brooks listed “increasing financial
access, giving people greater control over their financial lives,
and accelerating global payments.”

The former top banking regulator is particularly concerned about
a proposal by Congresswoman Maxine Waters. He urged the Biden
administration not to “combine politics and innovation.” Brooks
explained that “House Financial Services Chairwoman Maxine Waters
proposes reversing innovation that occurred in the last four
years,” adding that “She wants to retract the ability for banks
to hold cryptocurrency assets and to rescind guidance that banks
can support digital coins.”

There are also some outstanding crypto-related issues at the
U.S. Securities and Exchange Commission (SEC), including the
lawsuit against Ripple Labs and its executives. Biden has nominated
MIT’s blockchain professor
Gary Gensler
to become the new SEC chairman.

Do you think Biden will scrap FinCEN’s crypto wallet
proposal
? Let us know in the comments section
below.

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Translator / 翻译者 / Traductor