Coinbase claimed that the U.S. Treasury’s suggested regulations on cryptocurrency mixing fall short of addressing a regulatory void while requiring needless quantities of data and resources from cryptocurrency platforms.
Coinbase stated in a Monday response submitted to the Financial Crimes Enforcement Network (FinCEN) of the Treasury Department that regulated cryptocurrency platforms are already required to follow record-keeping and reporting guidelines for suspicious activity and illegal cryptocurrency mixing.
According to Coinbase, it would not be a cost-effective use of business resources for cryptocurrency platforms to be required to record all cryptocurrency mixing activity, even if it were done for legal reasons.
The absence of a financial barrier for reporting and recordkeeping was another point of contention raised in the application. The lack of a dollar limitation will “just lead to bulk reporting of non-suspicious transactions,” according to Coinbase Chief Legal Officer Paul Grewal in an X post.
Grewal stated, “Congress has said that kind of data dump is a waste of time and resources.” Coinbase’s answer was made in response to FinCEN’s October proposed rulemaking, which attempts to increase transparency around cryptocurrency mixing activities.
To address the issues raised, Coinbase proposed that FinCEN introduce a threshold to eliminate the bulk reporting of small transactions.
Additionally, Coinbase recommended focusing on recordkeeping instead of reporting to mitigate the privacy and security risks associated with mandatory reporting.
Also Read: Legal Expert Predicts Coinbase Win in SEC Lawsuit
