Regulation is getting tighter for BTC
Breaking news today points to yet another step down the road of anti-crypto regulation on those who choose to hold Bitcoin as a means of self-custody of their finances.
Although this news relates to American crypto investors, take note: when America sneezes, Britain and elsewhere catches a cold! In other words, regulation by America will most certainly mean regulations for other countries sooner rather than later.
According to Brian Armstrong, Coinbase CEO, the US Department of Treasury is allegedly considering proposals, which experts believe “could be an existential threat to Bitcoin.”
It is being suggested that the outgoing Trump administration is planning to implement a mandatory (KYC) - know your customer, rule for self-custody Bitcoin wallets, with the implications being more surveillance for Bitcoin holders.
According to CryptoBriefing, this would include all Self-custody wallets such as MetaMask, Bitcoin Core, hardware wallets such as Ledger and even paper wallets.
“This proposed regulation would, we think, require financial institutions like Coinbase to verify the recipient/owner of the self-hosted wallet, collecting identifying information on that party before a withdrawal could be sent to that self-hosted wallet.”
In other words, your Bitcoin could be stuck in your own hardware wallet unless you are prepared to undergo further KYC to move them from your wallet to sell them etc., This effectively is policing what you own, how much and where you are storing it. Crypto investors already have to go through mandatory compliance procedures whenever they register with crypto exchanges, however, this new proposal by regulators is yet another step in the direction of impinging on people's privacy and their ability to build wealth.
As the proposal is to target self-hosted Bitcoin wallets, it is difficult to see how regulators will enforce this or even keep track, as most wallets, if not the majority, are already anonymous, not to mention the many Bitcoins that have already been moved off exchanges in the last year alone.
Serious concerns are being expressed among the crypto community, with many claiming that should this proposal be implemented, it would hamper privacy as well as impacting on increasing risks to investors. In the words of Angel Investor, Balaji Srinivasan:
“The proposed new anti-crypto regulation by [Steven Mnuchin] is a form of financial disenfranchisement. It harms people who lack ID, further expands the surveillance regime, and sets up more honeypots for hackers. It must be resisted vigorously.”
Comments