Coinbase: Asking the U.S. Treasury to reassess cryptocurrency mixing rules

The U.S. Department of the Treasury intensified its crackdown on cryptocurrency mixing platforms in October last year, classifying mixers as an important money laundering problem and accusing them of posing a serious threat to national security. threaten. The Financial Crimes Enforcement Agency (FinCEN), part of the Treasury Department, has issued a Prior Notice of Proposed Regulations (NPRM) that would require U.S. financial institutions to maintain records of funds and report transactions involving mixed cryptocurrencies, sparking concern in the cryptocurrency industry. rebound. This move aims to strengthen the regulation of cryptocurrencies to curb the risks of money laundering and other illegal activities.

Today, Coinbase, the largest cryptocurrency exchange in the United States, submitted comments to the Treasury Department FinCEN urging it to reconsider its crypto mixing rules. They noted that the rule contained inappropriate measures and said trading platforms should not be required to report unnecessarily large amounts of data.

Coinbase General Counsel Paul Grewal stated in a tweet this morning that although Coinbase supports effective supervision, they do not favor extensive data collection and reporting requirements for all transactions involving cryptocurrency mixing. He pointed out that some coin mixing transactions did not show any signs of suspicious activity.

Calling for currency mixing rules to set monetary thresholds

Grewal pointed out that Coinbase believes that exchanges do not need to fill the regulatory gaps related to currency mixing transactions. “Regulated exchanges like ours already "We are required to investigate and report suspicious currency mixing activities related to this platform. Why does the Ministry of Finance now want us to report those "non-suspicious activities"?"

He also questioned whether the rule should set out currency mixing transactions. A minimum threshold for dollar amounts, as requiring all mixing transactions to be reported could result in a large number of reports containing non-suspicious small-amount mixing transactions, which would only waste time and compliance resources.

The Treasury Department can help exchanges meet existing obligations and encourage reporting of suspicious activity involving coin mixing. This specific guidance is more effective than mandatory bulk reporting rules.

Coinbase finally pointed out that if the Ministry of Finance insists on formulating new rules on currency mixing, it hopes to adopt at least the following suggestions:

• Increase the funding threshold to maximize Reduce reporting of useless information and reduce the heavy burden this places on exchanges

• Have the rule require financial institutions to keep records, not report

• Provide extended implementation period

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