Silicon Valley VC Defends Crypto In Controversial Treasury Rule Proposal

A major Silicon Valley VC defends crypto in the recent controversial treasury rule proposal as the FinCen branch confirmed that it is working on cracking down the crimes which are enabled by BTC and other cryptocurrencies. In our latest crypto news today, we find out more about it.

A new document that is about to be published by the Financial Crimes Enforcement Network showed that the rule will force virtual asset service providers to verify the name and the address of the non-custodial wallet users for transactions that surpass $3,000. Some think that it also applies to decentralized finance applications but these applications are still decentralized but it is not clear how it all works.

1/ There’s a reason the regulatory rulemaking process provides 30-60 days for notice & comment. So that those outside govt – consumers, industry, public interest orgs, academics, etc – have a meaningful opportunity to weigh in & provide viewpoints govt may not have considered

— Kathryn Haun (@katie_haun) December 20, 2020

The Treasury indicated that the “convertible virtual currencies” are becoming more prevalent in facilitating terrorist financing, sanction evasion, money laundering and more but while these concerns are valid, BTC is sometimes used in criminal transactions but the proposed rules misses the point. The public is free to comment on the ruling until early January at which one point it will be implemented through regulation into practice. Some think that January is too soon for the government to start moving forward with this and have also started responding extensively with analysis which only outlines why this could backfire.

Kathryn Haun, a general partner at a16Z focused on crypto assets and published an extensive thread that trashed the Treasury decision, and also give it some time to respond to the decisions:

 “Late yesterday, instead of following that process,  @stevenmnuchin1 slashed the ordinary comment period to just 15 days, on a Friday before the holidays no less, for crypto regulations that to us @a16z and others in the crypto space don’t make much sense.”

Been doing work on the rumored transaction reporting rule impacting digital assets (currently being contemplated by Treasury) and wanted to share with you where I am: Tweet storm to follow… (1/8)

— Cynthia Lummis (@CynthiaMLummis) December 18, 2020

The Silicon Valley VC continued to say that the normal 30 to 60 days in which the public is to respond to the public rulings, gives some insight into the veracity of the proposed rule:

 “In fact, agencies are encouraged to consider a longer comment period for complex areas. The global and distributed nature of crypto is nothing if not complex. The reason for this amount of time is simple: it’s about due process. The opportunity to be meaningfully heard.”

Not to mention, without the analysis, the industry has already determined that the proposed ruling is flawed and will only detract the innovation of the space. She continued:

“For these reasons & others we’ll detail publicly before the comment period closes Jan 4, we @a16z oppose the proposed regs & urge against their adoption (needless to say we also take issue w/the process for this midnight rulemaking, though makes it more amenable to challenge).”