FinCEN proposes reporting rules for transactions involving self-hosted wallets
FinCEN proposed new reporting, recordkeeping and identity-verification requirements for certain transactions between regulated institutions and self-hosted cryptocurrency wallets.
The December 18 notice of proposed rulemaking targeted transactions involving convertible virtual currency or digital assets with legal-tender status when a bank or money-services business interacted with an unhosted wallet or certain foreign-hosted wallets.
The proposal would have required reports and records above specified thresholds and customer identity verification in covered cases. For Bitcoin, the controversy centered on the boundary between regulated intermediaries and users holding their own private keys.
It was a proposal, not a final rule. Its compressed comment period and focus on self-hosted wallets nevertheless made it one of the year's most consequential U.S. policy fights over whether financial-surveillance rules should extend deeper into peer-to-peer cryptocurrency activity.