- Coinbase and Paradigm criticized FinCEN over recommendations to tighten rules for cryptocurrency mixers.
- The regulator proposed introducing stricter requirements due to the increased number of transactions associated with illegal activities.
- The companies believe FinCEN’s intentions will lead to a waste of time and collection of unnecessary information.
The Coinbase cryptocurrency exchange, Paradigm company, and a number of other digital asset market players have criticized the Financial Crimes Enforcement Network (FinCEN). The reason was recommendations to implement stricter rules for cryptocurrency mixers.
On January 22nd, 2024, Coinbase representatives sent a letter to the regulator stating that FinCEN’s requirements are burdensome and ineffective. The company claimed there is no “gap in the legal regulation” of mixers.
In addition, Coinbase believes that implementing new rules will lead to mass collection of information that will do little to help law enforcement. They will also pose a security threat due to excessive centralization of users’ confidential data, the company representatives said.
“Congress has stated that such data collection is a waste of time and resources. And we agree,” said Coinbase Chief Legal Officer Paul Grewal.
In addition to the cryptocurrency exchange, Paradigm and Consensys companies have expressed their protest against FinCEN’s recommendations. They demand finding a compromise solution that will balance security and privacy factors.
The position of the mentioned companies is supported by the Blockchain Association organization. Its representatives point to vague wording in FinCEN’s recommendations. The organization also believes the agency did not provide evidence confirming statements about the growth of illegal operations associated with mixers.
It is worth recalling that we wrote about US plans to designate cryptocurrency mixers as money laundering centers.
