US lawmakers express concern over Mnuchin’s rumoured non-custodial wallet regulations

Rep Warren Davidson and his colleagues argue that going after non-custodial wallets would “hinder American leadership”.

By · Dec 12, 2020 . 5min read

US lawmakers non-custodial wallet regulations latest news

Four members have expressed concerns over the rumored Steve Mnuchin; the outgoing Treasury Secretary plans to roll out regulations over non-custodial (self-hosted) wallets.

In a letter to Mnuchin, Rep Warren Davidson, the Congressman from the state of Ohio alongside Rep Tom Emmer from Minnesota, Rep ted Budd from the 13th District of North Carolina, and Rep Scott Perry from the State of Pennsylvania laid out consequences of such counter-productive action if followed through by the Treasury Department.

The letter in specific terms stated that going after non-custodial wallets would “hinder American leadership.” Some already perceive that the United States is still lagging as the budding blockchain leader and cryptocurrencies leader. As a counter-intuitive measure, the Congressmen expressed their concerns that the policy could backfire. The move could further

“undermine the Treasury Department from stopping illicit actors from exploiting the financial system.”

Consequently, the US regulations on non-custodial wallets will require crypto exchanges to verify KYC data for self-hosted wallets. And this scrutiny comes before they are permitting them to send cryptocurrencies out into the non-custodial wallets.

Seek approval from the US Congress before rolling out regulations targeting non-custodial wallets

In furtherance to Rep Davidson’s concerns alongside his colleagues, he said this effect in a published article. Davidson asked that Mnuchin should reach out to Congress for approval.

“before Treasury issues midnight rules on the regulation of self-hosted wallets, Secretary Mnuchin should come to the Peoples’ House and speak to representatives about what his regulations would do.”

And agreeing with Brian Armstrong’s earlier stance on the fallout from this “adverse” regulations,

“Over-regulating self-hosted wallets will crush a nascent industry and leave the United States behind the rest of the world when it comes to harnessing the power of blockchain and cryptocurrency”

On the other hand, Rep Emmer had sent a letter earlier the same day to SEC Chairman. He asked that Jay Clayton create some clear guidance on crypto custody. Consequently, he should facilitate the approval of the Financial Industry Regulatory Authority of broker-dealer’s framework in the industry.

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