In a bold stance against proposed regulations, Coinbase’s Chief Legal Officer (CLO), Paul Grewal, has criticized the U.S. Treasury’s recent rule on crypto mixing. Meanwhile, the company supports effective regulations but raises concerns about the potential burden of bulk data collection and reporting requirements.

This move has ignited a debate on the efficiency of such measures and their impact on crypto platforms. Notably, Paul Grewal has also challenged a recent U.S. Government Accountability Office (GAO) report expressing worries about cryptocurrencies evading U.S. economic sanctions.

Coinbase Challenges Proposed Rule for Crypto Mixing

Coinbase’s opposition to the U.S. Treasury’s proposed rule on cryptocurrency mixing is rooted in the belief that it fails to address a regulatory gap adequately. Coinbase CLO Paul Grewal, in his recent X platform posts, questions the necessity of demanding extensive data and resources from cryptocurrency platforms.

Meanwhile, the company, in its recent filing, argues that regulated platforms, including Coinbase, are already obligated to adhere to recordkeeping and reporting rules related to suspicious activities and illicit crypto mixing.

In addition, the filing showed that the proposed requirement for crypto platforms to report all crypto mixing activities, regardless of their legitimacy, is inefficient and imposes an unnecessary burden on companies. Notably, Grewal emphasizes the absence of a monetary threshold, predicting that it would result in a “bulk reporting of non-suspicious transactions,” echoing concerns raised by Congress about the wastefulness of such data dumps.

Also Read: BTC Price Drops Over 20% Under $40,000 After Bitcoin ETF Approval

FinCEN’s Crypto Mixing Rule & Recent Response

The Financial Crimes Enforcement Network (FinCEN) introduced a proposed rule in October, aiming to enhance transparency around crypto mixing activities and track the activities of crypto mixers. However, Coinbase’s response, filed with FinCEN, emphasizes that the company is already committed to addressing suspicious activities related to mixing and questions the efficacy of the proposed reporting requirements.

On the other hand, the absence of a monetary threshold in the proposed crypto regulation, according to Coinbase, could lead to an inefficient and resource-consuming bulk reporting of transactions.

However, Coinbase suggests that instead of imposing mandatory bulk reporting rules, the U.S. Treasury should offer specific guidance to help crypto exchanges meet their existing obligations. Besides, the company recommends the inclusion of a monetary threshold to streamline reporting, reducing the burden on crypto platforms. Additionally, Coinbase proposes a shift from reporting to recordkeeping to navigate potential privacy and security risks associated with extensive data reporting.

Meanwhile, Coinbase’s challenge to the U.S. Treasury’s proposed crypto mixing rule underscores the ongoing debate surrounding the balance between regulatory oversight and operational efficiency within the cryptocurrency industry. As stakeholders continue to voice their concerns and suggestions, the regulatory landscape for crypto platforms remains dynamic and subject to ongoing discussions and negotiations.

Also Read: Bitcoin Inches Closer To Dip Below $40K As SUI & FTT Take The Lead

The post Coinbase CLO Challenges US Treasury’s Crypto Mixing Rule, Here’s Why appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am