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According to the foreign outlet The Verge,Twitter and Square CEO Jack Dorsey are not satisfied with the new cryptocurrency regulation proposed by the US government. In a letter posted on the company’s website, he emphasized how the regulation would harm Square, the company. of financial services.
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In October, Square bought Bitcoin worth $ 50 million. The company has also invested heavily in the cryptocurrency ecosystem. These regulations create “unnecessary friction and inappropriate incentives for cryptocurrency clients to prevent regulated entities from transacting cryptocurrency,” Dorsey wrote.
This regulation proposed by the Financial Crimes Enforcement Network (FINCEN) of the US Department of the Treasury will require financial institutions (such as Square) to collect the personal information of parties involved in cryptocurrency transactions, but the most important requirement is that financial institutions collect whatever volume they participate in. The names and physical addresses of both parties to the transaction.
The regulation is designed to help prevent some illegal uses of cryptocurrencies, such as drug trafficking, money laundering, and “international financing of terrorism.” But Dorsey’s main concern is that they will create “unnecessary friction” between cryptocurrency users and financial institutions, which can lead to “inappropriate incentives.”
If (the regulations) are implemented in accordance with the written regulations, Square will be asked to collect unreliable data on those who have not opted in to our services or have not registered as our customers.
To use an example included in the letter, for example, a father used Square to send his daughter $ 4,000 in Bitcoin. Even if the daughter uses a private Bitcoin wallet on her computer, Square is obliged to collect her personal information, including her real address. Dorsey and other privacy advocates consider this to be an over-expansion, especially considering the openness of the blockchain.
Dorsey believes the regulation may eventually prompt clients to “use non-custodial wallets or services outside of the United States to more easily transfer their assets,” resulting in FinCEN “having less visibility in the universe of cryptocurrency transactions. that nowadays”. Simply put, if people have to provide private information to the bank to make a transaction, they will avoid using the bank, which Dorsey describes as an inappropriate incentive.
More importantly, Dorsey writes, this makes innovation difficult. “Cumbersome information gathering and reporting requirements deprive US companies like Square of the opportunity to implement cryptocurrency as an economic empowerment tool on a level playing field.”
This letter was sent as part of an unusually short comment period for the regulation. The standard public comment period for this type of policy is 60 days, but the comment period for this proposal is 15 days, many of which are holidays. The US Treasury Department’s reasoning was due to “significant national security needs,” but it did not provide further examples.
