FinCEN's Proposed Rule, More on the STABLE Act, and Crypto Twitter's HODL Act
HODLpac Newsletter - December 2020, Pt. 2
Hello HODLpac-ers,
It’s been a busy two weeks since our last newsletter. Let’s jump in to what you need to know about crypto-related politics and policy.
But first…
If you don’t already, please follow us on Twitter: https://twitter.com/HODLpac
And join our Discord, where we will be posting more frequently in the coming weeks and months: https://discord.com/invite/fDxHZxJ
Have an idea about something you want featured in this newsletter? Reply here or tell us on Discord! A goal for 2021: make the HODLpac newsletter a community-curated collection of crypto policy news and commentary.
Now, here is what you need to know…
FinCEN’s Crypto Wallet Rule
In our last newsletter, we said the self-hosted wallet battle was coming but we didn’t know when. Well, it’s here.
FinCEN - the Financial Crimes Enforcement Network - is a bureau of the Treasury Department that focuses on preventing money laundering and other “illicit uses” of the financial system. On December 18th, they issued a proposed rule on “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets.”
From the Treasury Department’s press release:
Under the Notice of Proposed Rulemaking (NPRM) submitted to the Federal Register today, banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving [convertible virtual currency (CVC)]/[digital assets with legal tender status (LTDA)] wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.
The button above will take you to the primary source text but here are some news stories on the topic:
“US Floats Long-Dreaded Plan to Make Crypto Exchanges Identify Personal Wallets,” Nikhilesh De and Danny Nelson, CoinDesk
“Some Cryptocurrency Trader Disclosure Required in Proposed Rules,” Paul Kiernan, Wall Street Journal
“Treasury Proposes Crackdown on Virtual-Currency Transfers,” Saleha Mohsin
and Benjamin Bain, Bloomberg
And here are some links to helpful commentary from the crypto industry:
And last but certainly not least, make sure to check out Coin Center’s blog on the topic, “A Midnight Rule for Cryptocurrency Transaction Reports.”
What happens next?
People who wish to respond to FinCEN’s proposed rule only have until January 4th to do so because of a rushed timeline imposed by the government.
After that, FinCEN will release its final rule and we’ll see what feedback, if any, was integrated. We may also see further legal challenges from groups like the Blockchain Association and others.
What can HODLpac do?
HODLpac’s role in this fight is to make sure the crypto community is educating our representatives in Congress and that our voices are being heard in DC. This rule was proposed by the Treasury Department in accordance with the Bank Secrecy Act, which means that its power to do so is ultimately derived from Congress.
HODLpac is a forum for the users and builders of the cryptoeconomy in the United States to engage with their representatives in Congress and support those who champion our cause.
Thankfully, some of those champions are already speaking up on this issue.
Senator-elect Cynthia Lummis from Wyoming - who appeared on the What Bitcoin Did podcast on December 14th - displayed an encouraging grasp of the issues and why she deserves our support:
As did some of crypto’s champions in the House, Rep. Warren Davidson (HODLpac interview here), Rep. Tedd Budd (HODLpac interview here), Rep. Tom Emmer (HODLpac interview here), and Rep. Scott Perry:
Do you wish your member of Congress would speak out on these issues?
Reply to this email or join the HODLpac Discord (https://discord.com/invite/fDxHZxJ) and let us know.
Do you want to make sure these or other members of Congress get HODLpac’s support?
Donate here, get your HODLvote tokens, and vote for them during our next Community Ballot.
More on the STABLE Act
One of the big crypto-related policy stories continues to be the STABLE Act.
In our last newsletter, we included a bunch of interesting links on the topic. Here are some more from the continued #discourse:
Nic Carter in CoinDesk: “Nationalizing Stablecoins Won’t Improve Financial Access”
Here is STABLE Act advisor Rohan Grey’s response to Nic’s piece.
Rohan Grey and Jeremy Allaire with Frank Chaparro on The Block Live.
Coin Center’s Jerry Brito and Peter Van Valkenburgh on Bankless discussing the STABLE Act and a host of other things. Podcast and video.
Rohan Grey on Bankless (releasing 12/21).
“Why Rohan Grey Believes Stablecoin Issuers Need to Be Banks,” Unchained Podcast with Laura Shin
The HODL Act?
There isn’t much to report on this yet but here’s something we’re keeping an eye on.
Pierre Rochard of Kraken posted about “The Bitcoin HODL Act.”
We like the idea… and the name. And an anonymous legislation-drafter? Pretty cool.
Pierre has been hinting at more of these types of proposals for Congress. We’ll see if they can gain support.
We know he has the ear of at least one member of Congress: Rep Warren Davidson appeared on the Noded Podcast on December 17th.
HODLpac-ers, what do we think of this?
Reply here or join the HODLpac Discord (https://discord.com/invite/fDxHZxJ) and let us know.
Extra Credit
Here are some other interesting reads, listens, and streams to check out…
“The American heartland needs jobs. Could Bitcoin mining become its next savior?,” Jeff John Roberts, Fortune Magazine
“The Growth and Regulatory Challenges of Decentralized Finance,” presentation by Prof. Aaron Wright (OpenLaw and the LAO) at the CFTC’s Technology Advisory Committee.
“The four contenders to be Joe Biden’s SEC chair,” Thornton McEnery, New York Post
“Bank chief proposes far-out crypto idea ‘that should be next Nobel Prize’,” Robert Hackett, Fortune Magazine
“What Coinbase Going Public Means for the Crypto Industry,” Liam Frost, Decrypt
“Bitcoin Can Only Help Performers on Pornhub If People Pay for Porn, Period,” Leigh Cuen, VICE
Did we miss anything?
Join us on Discord or Twitter and let us know!
Finally, if you’ve donated to HODLpac or are a subscriber to this newsletter and you haven’t received HODLvote tokens, shoot us an email at tyler@hodlpac.org with your Metamask address and we’ll send them to you right away!