Major players in the U.S. crypto lobby are stepping out to defend untrusted wallets.
On Tuesday, lA blockchain association released a new report presenting policy options for self-hosted wallets to regulators. The Coin Center has one on Wednesday Expert opinion by Jai Ramaswamy, who also defends such wallets.
The Blockchain Association is a corporate organization for the crypto industry, while the Coin Center is a non-profit organization that advocates decentralization before the legislature. Both are based in Washington D.C.
Ramaswamy He currently works in the compliance department of Celo’s parent company, C Labs, and was previously Head of Anti-Money Laundering (AML) at the US Department of Justice. His work focused on the role of the banking secrecy law in cryptocurrencies and the increased regulatory efforts in decentralized financial and peer-to-peer (P2P) transactions. These areas lack the intermediaries that regulators need to get financial data.
Ramaswamy and the Blockchain Association agree where AML enforcement efforts are best suited to crypto-to-fiat ramps, typically exchanges. Use the term Financial Action Task Force, VASP, or Virtual Asset Service Provider. The Blockchain Association highlights them as the area of real concern:
“Given the non-compliant businesses already subject to the global anti-money laundering and terrorist financing regime, non-compliant OTC exchanges and brokerage firms represent the The additional restrictions on self-hosted wallets would not eliminate the significantly increased risk of non-compliant VASPs as the system of Combating money laundering and terrorist financing is a big hole in the digital asset ecosystem. “
Ramaswamy predicted that Any attempt to ban self-hosted wallets in the name of combating money laundering would fail:
“A sobriety test of technology explains why these efforts are doomed and only serve to undermine, rather than reinforce, efforts to detect and reduce illegal financial activity.”
The Blockchain Association report has been identified Three possible guidelines regulators might put in place to combat P2P between wallet transactions:
“Prohibit or deny the licensing of platforms that allow the transfer of non-hosted wallets, impose transaction or volume restrictions on peer-to-peer transactions, or require transactions through a VASP or financial institutions.”
But like Ramaswamy, The employees of the Association Blockchain are skeptical of the technical implementation in the real world. Miller Whitehouse-Levine, Policy Manager at the Blockchain Association, told Cointelegraph: “Limiting P2P transactions (between self-hosted wallets) would require changes to the underlying protocols.” The managing director, Kristin Smith, he kept saying: “The fear is that the only way to enforce it is to cut off transactions to and from self-hosted and hosted wallets.”
There are currently no active policy proposals for non-hosted portfolios. But rumors have been circulating for some time about plans to enforce the “white list” mentioned by Smith. This plan would only allow cryptocurrencies to be exchanged with wallet addresses obtained from other approved and regulated sources, thereby referencing self-hosted wallet addresses.
More general, Cryptocurrencies are still on the radar of the watchdog against money laundering, the Financial Crime Control Network or the FinCen. The organism recently caused a stirI am posting plans to lower the standards from the old international transaction reporting threshold from $ 3,000 to $ 250. They also played a role in the growing list of recent law enforcement actions against cryptocurrency companies.