The Financial Crimes Enforcement Network (FinCEN) is extending its comment period for a controversial surveillance rule that had the crypto industry up in arms.
In a press release Thursday, FinCEN announced it would reopen its proposed rulemaking period for an additional 15 days for its proposed reporting requirements, and another 45 days for a requirement on recordkeeping and counterparty reporting requirements.
First submitted Dec. 18, the proposal would require exchanges to store name and address information for customers transferring over $3,000 in crypto per day to private crypto wallets, and file currency transaction reports for customers transacting in over $10,000 per day.
Critics of the rule also maintained that it would be technically impossible for some projects to comply with, as smart contracts and author decentralized tools do not have name or address information to provide.
Perhaps most importantly, the 15-day extension means that Treasury Secretary Steven Mnuchin, who is said to be spearheading this effort, will be out of office by the time comments close, perhaps allowing for FinCEN to better incorporate industry feedback.
In its public notice, FinCEN wrote that the proposed reporting requirements “are essentially equivalent to the existing CTR reporting requirements that apply to transactions in currency,” and called the proposal “vital” to closing loopholes that terrorists or other malicious actors might use. This is the part that will see a 15-day extension for comments.
FinCEN was less effusive about the recordkeeping and counterparty details, only writing, “FinCEN is providing a longer period in light of the somewhat greater complexity of those aspects of the proposed rule and various issues identified in comments received during the original comment period.”
This was the part that raised the most controversy from the industry, receiving over 7,000 comments from the industry, with the majority of responders criticizing the rule or the speed by which it was being pushed through.
The extension doesn’t mean the rule will not be implemented; it’s still entirely possible that FinCEN will choose to run with the rule after the final version is published.
The new clock restarts when the document is published in the Federal Register, the nation’s logbook. According to public documents, this will be Jan. 15.
UPDATE (Jan. 14, 14:11 UTC): Adds context throughout.