The CEO of Coinbase, Brian Armstrong, has taken to Twitter to air his opinions as the Trump administration’s tenure is drawing to an end. The CEO noted that the administration might want to leave the crypto sector with one last touch. Brian Armstrong said this after he took to Twitter yesterday to call out the United States Treasury Department over its rumored move to collate vital data from owners of self-hosted crypto wallets.
Suppose the rumors are anything to go by; In that case, it means that the current Secretary of the Treasury Department, Steven Mnuchin, is making a move to clamp down on one of the basic reasons why people hold digital assets; the powers it bestows them to keep their assets themselves without being molested.
The new regulation will limit transactions between self-owned wallets and regulated exchanges
In his tweet, Armstrong positioned that the new regulation would mean that Coinbase as a crypto exchange, will not be able to send digital assets to a self-owned wallet except they reveal their data. “This new regulation is something that will mandate Coinbase and other financial exchanges to collect information that will help us to identify the users of specific self-owned wallets before a withdrawal can be effected to the wallet,” Armstrong said.
If the new regulation finally comes into effect, it will again represent another move against the United States government’s crypto industry. This will mean that financial institutions would need to gather massive informations such as details of the individuals their users are sending crypto to, transaction logs, movements, verification of identity before making a transfer.
Rumored regulation might trigger the FATF directive
This new rule might also usher in the much-dreaded scenario predicted by analysts and experts after the Financial Action Task Force told its member countries to place travel restrictions on crypto-related businesses last year. The FATF advised governments to trigger the limits if crypto-related companies fail to reveal the sender’s identities and receiver of digital assets on their platform.
Even though the rule talked about transfer from financial exchanges to privately owned wallets, the CEO noted that it didn’t address specific issues like if a transfer is effected from Coinbase to a private key controlled paper waller kept in a sock drawer.
When asked about this, the Treasury Department failed to give a direct answer. If the law is finally passed, it will not only affect those with hardware wallets; it will affect most users that use non-custodial wallets to make transactions. Also, decentralized finance smart contracts, software wallets, and paper wallets will need to prove ownership before allowing them to carry out transactions with regulated exchanges like Coinbase.