Jack Dorsey Warned That FinCEN Rules Will Drive Crypto Users Away

Jack Dorsey warned that the latest FinCEN rules will most likely drive away all crypto users because the rules stifle innovation as we can see in today’s cryptocurrency news.

Most US Crypto companies united to oppose the new AML laws that were proposed by the FinCEN regulatory body. According to the new rules, all crypto businesses will have to gather information on the identities of non-customer counterparties. In a letter that he wrote, Jack Dorsey warned that these rules will only drive away crypto users.

The CEO of Square and founder of Twitter took aim at the proposal for seeking to impose all obligations that require reporting of customers that go beyond what is required for cash transactions, and also said further that Square will be expected to collect “unreliable data about people who have not opted into our service or signed up as our customers.” He continued:

 “Counterparty name and address collection/reporting should not be required for [virtual currency] CTRs or recordkeeping, as it’s not required for cash today.”

Square predicted that if passed, the law will drive crypto users towards an unregulated and non-custodial crypto service that is based outside of the US which will certainly impact the nation’s global competitiveness and will create further challenges for regulators:

 “By adding hurdles that push more transactions away from regulated entities like Square into non-custodial wallets and foreign jurisdictions, FinCEN will actually have less visibility into the universe of cryptocurrency transactions than it has today.”

FinCEN received widespread criticism for the rule changes with the regulator offering about two weeks which is less than the usual 60 for public comment after publishing the proposal at the end of December. More than 600 comments were submitted to the regulator on the matter. Major US Exchange Kraken was among the ones criticizing the proposed regulations and slammed the regulator for failing to provide estimates for the cost of implementing the rule. Square also warned that the law will drive users away from the regulated platforms. Kraken added:

 “It virtually guarantees that the evidence available to law enforcement today will be placed outside their reach tomorrow. It is quite clearly a politically-motivated piece of midnight rulemaking, the publication of which diminishes the trust we have placed in FinCEN.”