Coinbase criticizes the US Treasury Department’s accounting requirements for cryptocurrency mixing transactions

What’s new? Crypto exchange Coinbase has criticized the US Treasury Department’s requirements aimed at tightening control over cryptocurrency mixers. Coinbase believes that the obligation to report all cryptocurrency mixing activities, including those with legitimate purposes, leads to inefficient use of industry company resources while failing to address the regulatory gap.

Coinbase’s appeal

What else is known? In a letter to the Department of the Treasury’s Financial Crimes Enforcement Network’s (FinCEN) staff, Coinbase noted that regulated cryptocurrency platforms are already required to account for and report suspicious activity and illegal cryptocurrency mixing. At the same time, the Department of the Treasury’s new requirements do not include a threshold for the amounts of transactions to be recorded, which leads to the accumulation of large amounts of data and burdens the staff with additional work.

Paul Grewal, the exchange’s chief legal officer, noted that the lack of a monetary threshold will lead to the need to report on a large number of transactions that do not arouse any suspicion.

Source: Twitter.com

“Congress has said that kind of data dump is a waste of time and resources. We agree. If Treasury wants to focus on this issue, they should help Exchanges meet their existing obligations to report suspicious activity involving mixing. This is what Treasury has done elsewhere, and specific guidance is more effective than mandatory bulk reporting rules,” Greval stressed.

As an alternative, Coinbase suggested FinCEN add a monetary threshold to eliminate mass reporting of small transactions, and recommended leaving only a recordkeeping requirement, not a reporting requirement, to circumvent privacy and security risks.

Last October, the US Treasury Department labeled crypto mixers a threat to national security and proposed stricter recordkeeping requirements for related transactions. After that, US crypto platform Swab Bitcoin announced that it would start blocking users for interacting with mixers.

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