The Silicon Valley-based venture capital firm Andreessen Horowitz (a16z) believes the recently proposed cryptocurrency rulemaking by the US Financial Crimes Enforcement Network (FinCEN) "violates the government’s own established procedures."
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.
In an official statement, a16z writes that the watchdog proposes a "rushed, non-vetted" regulation of the cryptocurrency market.
"Such an ill-advised regulation will have many foreseeable and unintended negative consequences," a16z emphasized.
Last year, FinCEN proposed not only tracking transactions, but also identifying unhosted digital wallets. FinCEN is proposing to adopt these requirements pursuant to the Bank Secrecy Act.
The published rules, if and when they are accepted, will require all centralized cryptocurrency exchanges and banks to impose additional layers of know-your-customer (KYC) and anti-money laundering (AML) policies for its clients. The proposed new rules will also require financial institutions and crypto exchanges to track all transactions with a value of more than $3,000.
a16z highlights FinCEN's proposed rule has all the hallmarks of an "arbitrary and capricious agency action." The venture capital firm urged the watchdog to withdraw its rule or at a minimum extend the comment period.
As iHodl reported in November 2020, the Dutch Central Bank (DNB) already imposed the same limitations on cryptocurrency exchanges with an additional verification measure regarding bitcoin (EXANTE: Bitcoin) addresses. According to the local cryptocurrency exchange Bitonic, the DNB "effectively forced" it to enhance the verification process in reference to the Sanction Act.
Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange.