Nov 23, · SEC Chairman Jay Clayton Explains US Crypto Regulation, Calls Bitcoin a Store of Value The chairman of the U.S. Securities and Exchange Commission (SEC) has explained how the U.S. government is regulating cryptocurrency. He calls bitcoin a store of value, noting that its rise is driven by the inefficiencies of the current payment system. Dec 24, · The Financial Crimes Enforcement Network proposed new Bitcoin and cryptocurrency regulations on Friday, December 18th, at , just as Bitcoin’s . Dec 29, · The UK is planning stricter regulations on Bitcoin. On. Nov. 14, , the Financial Conduct Authority in the UK published a warning to consumers about the risks of investing in cryptocurrency Author: Francine Mckenna.
Us regulations bitcoinIs Bitcoin Legal in the USA? ( Update) - Decrypt
But the outgoing US government cooked up a very unpleasant surprise for American crypto users that might ruin Bitcoin and nearly every other digital currency. And it has the potential to harm international users as well. Bitcoin was developed as a response to banks, which were largely responsible for the economic crash. It offers anonymity, making it practically impossible for anyone to track your actions online when transacting a digital coin.
The same concepts apply to all the other blockchain projects that come with associated digital coins. The ability to bypass central banks is something financial institutions might not appreciate. But that second feature, the anonymity, is what governments do not appreciate.
There is a good reason for that. Bitcoin can be used to fund illicit actions, including terrorism, drug deals, and similarly nefarious actions. They concern digital wallets, which are used to store cryptocurrencies. A lack of regulatory clarity has been a big roadblock to more institutional activity in crypto, and major pronouncements like this help move the needle.
It is highly technical, often bespoke work with no easy corollary in traditional finance. In addition, while the OCC will permit national banks to custody cryptocurrency, for the time being, the letter does not expand FDIC insurance coverage to cryptocurrency. Most cryptocurrency businesses and exchanges rely heavily on the banking rails for customers to fund their accounts with fiat to exchange for cryptocurrency.
Representations of the Bitcoin cryptocurrency are seen in this illustration photo taken in Poland on There is evidence that cryptocurrency is not actually used more often for money laundering or illicit crimes than fiat currency and many banks have already put the compliance and legal guardrails in place to safely bank cryptocurrency companies.
Silvergate Bank, for example, was one of the first banks to provide fiat bank accounts to major cryptocurrency companies and exchanges. Cryptocurrency companies have routinely attempted to maintain multiple banking relationships to diversify the risk of losing an account. In many ways cryptocurrency is actually better for fighting money laundering and illicit activity. Under new proposed regulations from the Financial Crimes Enforcement Network, it may become much easier for the government to track bitcoin transactions.
The proposed regulations in question, which were filed at PM ET on December 18th, are about private wallets. And if I want to do business with someone else who has a private wallet, I need to tell the exchange some pretty detailed personal information. The exchanges are then required to store records of all this and turn them over on request.
You can see why Coinbase — or any other exchange — would see this new know-your-customer requirement , at minimum , as a complete pain in the ass. Cryptocurrency exchanges make it easy to move from dollars or whatever into a cryptocurrency and vice versa. That also means that they make cryptocurrency accessible to more people. The current FinCEN proposal makes more work for these exchanges and for the people operating within them as well as undermining the anonymity for which cryptocurrency is famous.
Taken in combination with another recent proposed rule change about how to report cryptocurrency that crosses borders, you can see why some cryptocurrency enthusiasts are nervous. There are some concrete consequences to this, the EFF points out. First, it makes anonymity more difficult in a transaction between a private wallet and one hosted by an exchange service. Second, the proposed legislation also makes it less appealing to have a private wallet. But the third problem is the real kick in the ass: some cryptocurrencies, including bitcoin, record all transactions publicly.