Bitcoin Advocates Challenge Trump Administration’s Rush to Regulate Cryptocurrency

The cryptocurrency community is mounting a fierce opposition against proposed regulations from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), which many view as rushed and overly burdensome.

The Controversial Regulations

Under Treasury Secretary Steven Mnuchin’s leadership, FinCEN has proposed two significant crypto-related rules:

1. Transaction Reporting Requirements:

   • Exchanges must record transactions over $3,000 sent to private wallets
   • Daily transactions exceeding $10,000 must be reported to FinCEN

2. Foreign Holdings Disclosure:

   • Americans must report crypto holdings worth more than $10,000 at foreign service providers

Key Concerns from the Crypto Community

• Unusual Urgency: The 15-day comment period (vs standard 60 days) for complex regulations
• Surveillance Overreach: Requirements exceed those for traditional banking transactions
• Technical Feasibility: Many experts argue the rules misunderstand blockchain technology

Industry and Legislative Pushback

Over 65,000 critical comments were submitted to FinCEN, including from major players:

• Square: Called the data collection requirements “unreliable” and intrusive
• Fidelity: Expressed concerns about regulatory overreach
• Coin Center: Warned the rules would limit access to decentralized services

Nine members of Congress and incoming Senator Cynthia Lummis have criticized the rushed timeline, with Lummis calling it “ridiculous.”

Legal and Technical Challenges

Experts highlight several flaws in the proposals:

• Technical Misunderstandings: Confusion about how bitcoin addresses work
• Legal Process Concerns: Potential failure to properly consider public comments
• Implementation Burden: Prohibitively high compliance costs for U.S. companies

Peter Van Valkenburgh of Coin Center stated: “If it’s obvious they didn’t consider all the comments… it would be very easy to argue in court.”

What’s Next for Crypto Regulation?

The crypto community is watching closely to see how the Biden administration will approach these regulations. Many hope for more thoughtful, technically-informed policies that balance innovation with legitimate oversight needs.

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