Regulating Unhosted Wallets: Concerns and Implications

Jeremy Allaire of Circle Pay and Kristin Smith of the Blockchain Association explain the impact of and motivation behind Treasury Secretary Steve Mnuchin’s proposed FinCEN rule that targets “unhosted” wallets. In this episode, they cover:

• what the new FinCEN rule says, and how it would impact unhosted or self-hosted wallets, as well as crypto businesses
• why they believe this is really politically motivated and unilateral midnight rule making by Secretary Mnuchin 
• what other bureaucrats and policymakers think should be done instead 
• whether the rule only affects businesses rather than individuals 
• what information will be recorded according to the rule
• ways to circumvent compliance 
• how the rule affects DeFi and Web3
• the procedural hurdles Mnuchin took to propose the rule, and what they recommend the crypto community to do try to stop the implementation of the rule 
• how the rule comports with European GDPR regulations 
• which government entities will be tasked with making the regulatory changes the space needs 
• why President-Elect Joe Biden’s administration may be more favorable for the space

Thank you to our sponsors! 

Crypto.com: http://crypto.com

1inch: http://1inch.exchange 

Episode links: 

Jeremy Allaire: https://twitter.com/jerallaire 

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

Circle: https://www.circle.com/en/

The Blockchain Association: https://theblockchainassociation.org

Stories on proposed rule: 

https://www.coindesk.com/fincen-proposes-kyc-rules-for-crypto-wallets

https://www.theblockcrypto.com/post/88347/treasury-crypto-wallets-reporting-rule

Effect on DeFi: https://twitter.com/jerallaire/status/1340060806088671232?s=20

https://twitter.com/jchervinsky/status/1340050400871911424?s=20

Coin Center response: https://www.coincenter.org/a-midnight-rule-for-cryptocurrency-transaction-reports/

Brian Armstrong’s earlier tweet thread: https://twitter.com/brian_armstrong/status/1331745196887867393

Collins Belton’s tweet thread: https://twitter.com/collins_belton/status/1340051986008350721?s=20

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