WASHINGTON—Concerns related to cryptocurrency regulation and oversight have been raised by Sen. Pat Toomey (R-PA) in a letter to Treasury Secretary Janet Yellen.
The first concern relates to FinCEN’s proposed rule for cryptocurrency transactions and the second relates to the Financial Action Task Force (FATF) guidance on cryptocurrencies and virtual asset service providers (VASPs), Toomey wrote.
“While I recognize that FinCEN and FATF’s proposals are seeking to address the misuse of cryptocurrencies for illicit activity, if adopted, they would have a detrimental impact on financial technology (fintech), the fundamental privacy of Americans, and efforts to combat illicit activity,” Toomey stated. “I urge you to make significant revisions to them.”
In the first part of his letter, Toomey also stated, “Fostering financial innovation is important” for the U.S., adding he believes “cryptocurrencies stand to dramatically improve consumers’ privacy, access to financial services, and power to make decisions for themselves.”
‘Negative’ Implications
Toomey further asserted FinCEN’s proposed crypto rule “will negatively impact” the U.S., citing two key reasons: It would impose “onerous recordkeeping” and reporting requirements on crypto transactions “that extend beyond existing requirements for U.S. dollar transactions.”
“FinCEN’s proposed rule may also prove to be counterproductive in combating illicit activity … By limiting individual privacy and the ability to transact with financial institutions, the rule would likely push bad actors to utilize methods that do not interface with financial institutions,” he said. “As a result, such cryptocurrency transactions would be less susceptible to appropriate government oversight and detection.”