Navigating Cryptocurrency Regulations

Jake Chervinsky, general counsel at Compound Labs, and Kristin Smith, executive director of The Blockchain Association, talk about the storm brewing in the cryptosphere involving self-custody and privacy. In this episode, they cover:

• the differences between hosted and self-hosted wallets and how transactions between them differ
• why the ability to transact from self-hosted wallets is so important
• compliance and regulation in the traditional financial world and how it could affect self-custody
• the “Swiss rule” and what it could mean for the rest of the world
• the proposal by FinCEN to lower the threshold for collecting data on transactions from $3,000 to $250
• how regulators might achieve their goals without “dragnet” surveillance
• how the amount of crime and money laundering in the traditional financial system compares to that in the crypto world
• why OTC brokers are considered the most significant money laundering risk in crypto, and how that risk might be mitigated
• how different political environments can influence the value of peer to peer transactions
• whether Americans should be willing to give up some of their financial privacy in favor of security
• what the recent statement by the DOJ's cryptocurrency enforcement framework labeling anonymous transactions as "high-risk activity indicative of possible criminal conduct" could mean for privacy coins like Monero and Zcash
• Gary Gensler's appointment as head of Biden's financial policy transition team and whether to view it as a positive or negative for crypto
• whether they think the incoming Congress will be in favor of more surveillance or more privacy
• whether there might eventually be regulations for developers who write code for self-hosted wallets
• how potential rules regarding self-custody could affect non-monetary items like NFTs
• and the next big developments they are watching out for regarding this issue

Thank you to our sponsor! 

Crypto.com: http://crypto.com

Episode links: 

Jake Chervinsky: https://twitter.com/jchervinsky

Compound Labs: https://compound.finance

Kristin Smith: https://twitter.com/kmsmithdc

The Blockchain Association: https://theblockchainassociation.org/

https://twitter.com/BlockchainAssn

FinCen NPRM: https://www.federalregister.gov/documents/2020/10/27/2020-23756/threshold-for-the-requirement-to-collect-retain-and-transmit-information-on-funds-transfers-and

Coin Center commentary on lowering FinCEN threshold: https://www.coincenter.org/app/uploads/2020/10/Coin-Center-Comment-FinCEN-FRB-250-threshold.pdf 

Unchained episode about the FATF travel rule: https://unchainedpodcast.com/why-the-travel-rule-is-one-of-the-most-significant-regulations-in-crypto/ 

The choice of Gary Gensler to lead the financial policy transition team: 

https://www.wsj.com/livecoverage/trump-biden-election-day-2020/card/peMRHGPJasECSPLezSFx

https://www.coindesk.com/biden-confirms-gary-gensler-will-lead-financial-policy-transition-team

Shapeshift delists Zcash: https://www.coindesk.com/shapeshift-delists-privacy-coin-zcash-over-regulatory-concerns

Jessie Liu interview on Unchained: https://unchainedpodcast.com/what-you-need-to-know-about-the-dojs-cryptocurrency-enforcement-framework/

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