US Treasury Department Proposes New KYC Requirements for Cryptocurrency Transactions - Blockchain.News

US Treasury Department Proposes New KYC Requirements for Cryptocurrency Transactions

The U.S Treasury Department has released a notice concerning a new rule that would require money services businesses and banks to verify identities, keep records, and submit reports of users holding crypto assets in unhosted wallets.

  • Dec 19, 2020 07:38
US Treasury Department Proposes New KYC Requirements for Cryptocurrency Transactions

US crypto users seeking to transfer their assets from a cryptocurrency exchange to their own personal wallets will have to comply with a new KYC requirements under a regulation proposed by the Treasury Department. - 2020-12-19T153455.954.jpg

In an effort to address anonymous transfers of digital assets by bad actors, the US Treasury Department has launched a plan to require some crypto users to offer information about their identities. The new plan targets private accounts that allow the holder of a unique digital key to store crypto assets and transact with others directly without going through a financial institution. Such accounts are known as unhosted or self-hosted wallets - a form of software (thumb drive) on a user’s cellphone or computer. The wallets are not held on a bank or a registered exchange.

In the new proposed regulation, the Treasury Department requires banks and money service businesses such as popular crypto trading platforms like Gemini, Coinbase to verify the identities of self-hosted or unhosted wallet holders for any digital asset transaction that exceed $3,000.

Banks and crypto trading platforms would have to report any crypto transaction exceeding   $10,000 to the Financial Crime Enforcement Network (FinCEN) within 15 days.

Investors Embracing Digital Gold

This week for the first time, Bitcoin price has climbed to $20,000, before quickly surging to $23,000 yesterday. These are the latest in a series of significant milestones that have seen the price of the cryptocurrency rose by almost 400% since March. The current rally is impressive as investors looking to get higher returns have been moving to embrace the leading cryptocurrency this year in the wake of the COVID-19 pandemic.

Bitcoin’s recent embrace by institutional investors including PayPal has made people more confident about the cryptocurrency. Major institutional investors including billionaire Paul Tudor Jones, Square Inc., MicroStrategy, and others have been adding the crypto into the portfolios. The current rally validates longtime crypto bulls but also raises the question of whether this will end in tears. While the era of $20,000 might be temporary, the crypto asset is, more than ever before, here to stay.   

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