A Regulatory Rewind
On his very first day in office, President Joe Biden decided to hit the pause button on the federal regulatory machine, and boy, did he make waves! Amongst the many hot topics on ice is the previously proposed regulation governing self-hosted crypto wallets from ex-Treasury Secretary Steven Mnuchin. This regulatory freeze, as laid out in a White House memo, impacts all agency rulemaking for 60 days, effectively giving the crypto industry some breathing room.
Crypto Enthusiasts Rejoice!
Crypto insiders have given a hearty cheer at this unexpected gift. Jake Chervinsky, the General Counsel at Compound Finance, said it best:
“We fought hard & earned the right to take a breath & reset. Janet Yellen isn’t Steve Mnuchin. I’m optimistic.”
And let’s be honest, who wouldn’t want a breather after Mnuchin’s crypto villain origin story?
The Self-Hosted Wallet Proposal: A Recipe for Frustration?
The self-hosted wallet proposal from FinCEN back in December 2020 wasn’t exactly a crypto party; it required banks and money services to report, keep records, and even play detective to verify customer identities for transactions involving private wallets. Here’s the kicker: many in the industry argued this was not just a hassle but technically impossible. After all, if smart contracts don’t have name tags or addresses, how could compliance be achieved?
Criticism from the Crypto Sphere
Big names like Jack Dorsey, CEO of Square, were quick to voice their discontent, uttering that cryptocurrencies shouldn’t be held to stricter rules than cash. I mean, it’s not like folks are asked to fill out forms every time they make a cash withdrawal at the ATM, right? The sentiment was clear: privacy in crypto isn’t just an option; it’s a principle!
Janet Yellen: A Mixed Bag of Expectations
Now, with Janet Yellen taking the reins as Treasury Secretary, the mood has shifted somewhat, as she recently described crypto as being used mostly for “illicit financing.” Cue the dramatic music! However, Chervinsky remains hopeful:
“First, anyone is better than Secretary Mnuchin, who decided long ago that he hated everything about crypto. Second, although Dr. Yellen may not be a fan now, I expect she’ll be open to learning & listening, & will follow regular order in deciding on new regulations.”
A New Era with Gary Gensler?
To add to the rollercoaster, Biden has brought in Gary Gensler to lead the SEC. Gensler’s background suggests he might have a bit more sympathy for the decentralized mission than his predecessor did. With hopes of a more favorable regulatory environment on the horizon, the crypto community can lean back, relax, and possibly enjoy some popcorn while the legislative drama unfolds.
