Biden to Take Over Trump’s Legal Battle with Owners of Bitcoin
After President Donald Trump lost his re-election campaign, the Treasury Department pushed through new rules that would require financial services firms to record the owners of cryptocurrencies, including Bitcoin. The rules are designed to limit the use of cryptocurrency for such illegal activities as ransomware, drug trafficking and money laundering. Bloomberg News reports that the measure did not take effect because the comment period could not be completed before President Biden was inaugurated. The result is that President Biden and Treasury Secretary Janet Yellen have to deal with it.
The Treasury has the authority to do this under FinCEN, the Financial Crimes Enforcement Network. Financial institutions are covered by the Know Your Customer rule; they have to verify the identity of the people with whom they do business and report cash transactions over $10,000.
Bitcoin and most other cryptocurrencies were designed to be anonymous. Owners are tracked by a digital key, not by name. Reporting the names of those who trade it is a direct assault on the nature of this market.
Cryptocurrencies have many uses, most legal. But because they are anonymous, they are popular for illegal transactions.
If the rules take effect, they will almost definitely cause the price of Bitcoin to fall and the cost of crypto transactions to increase. Opponents include the crypto exchanges, big crypto investors and even some traditional financial services companies.
The Biden administration will have to deal with the comments and make a final decision. This administration didn’t start the fight, but it needs to see it through.
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