FinCEN extends comment period for proposed non-hosted wallets rule

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The Financial Crimes Enforcement Network (FinCEN) has extended the comment period for a proposed rule on non-hosted Bitcoin wallets that has divided the industry sharply. FinCEN has now given the public 60 more days to submit feedback on the rule.

FinCEN, a bureau that falls under the Treasury Department, announced the extension in an official notice. This was shortly after Janet Yellen was confirmed by the Senate as the new Treasury Secretary. The agency did not indicate a specific date of when the extension will expire.

First proposed in December, the Notice of Proposed Rulemaking (NPRM) imposes new requirements on banks and money service businesses when handling non-hosted wallets. These firms must verify identities, keep records and file reports on transactions over $3,000 involving such wallets. Under current rules, businesses report transactions exceeding $10,000 in value to hosted wallets.

The rule has come under criticism from some circles in the digital currency industry. Some have branded it financial surveillance while other think it will become a honeypot for financial data which will be prone to hacker attacks.

Now, the public has two more months to submit these, and any other views. In its notice, FinCEN stated:

“Today’s Extension Notice allows additional time to respond to all aspects of the proposed rule, and sets one closing date for the comment period. All comments to the NPRM will now be due 60 days from the date of publication of this Extension Notice in the Federal Register. FinCEN looks forward to reviewing any additional information submitted during this time.”

FinCEN had issued a 15-day extension earlier this month for its reporting requirements proposed rule. It had extended the comment period for its record-keeping requirements rule by 45 days. Prior to the extension, the bureau had already received 7,000 comments from the public.

Some of the notable responses were from Jack Dorsey’s Square payments platform and Washington-based blockchain trade association, the Chamber of Digital Commerce.

The association has praised the most recent extension. On Twitter, it described it as a “huge win for the industry.”

Others who have praised the extension include Jerry Brito, the executive director of digital currency think tank Coin Center. Brito claimed that he was happy to see a normal process taking shape. He added:

“I think there will be a final rule at the end of this process, likely with the CTR requirement, but I am extremely optimistic it will have none of the problematic counterparty identification requirements that were the real issue.”

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers