While cryptosphere players had until January 04, 2021 to debate FinCen’s new bill, Square waited until the deadline to make a decision. Like structures that reacted before it, the company has not failed to display its fears and reservations about the application of such a law. Referring to a needless search for additional information on wallet users, Square explains that FinCen’s proposal would only hurt the industry.
Traditional finance favored by FinCen
One of the main fears expressed by Square in his letter to the FinCen is of seeing cryptophiles move away from US markets for murkier waters.
The company mentions in particular the possibility that they opt for custodial services or portfolios located outside of US jurisdiction and passive in terms of regulations.
Calling on the regulatory authority not to create unnecessary friction, Square reminds her that she would also have a lot to lose by taking this path.
For Square, ” FinCen will actually have less visibility in the world of cryptocurrency transactions than it does today “.
The second fear of Square, and not least, is to attend the advent of an uneven playing field that would benefit traditional financial institutions.
She believes that this is a scenario that could arise if the FinCen was to be implemented.
Further, Square evokes an impediment to widespread adoption of cryptocurrencies and an invasion of customer privacy.
Square indicated that “if the proposal is implemented as written, Square would have to collect unreliable data on people who have not chosen our service or who have not registered as customers “.
FinCen destroys the foundations
In the last point addressed in his letter, Square does not understand why the FinCen strives to demolish the building under construction in the anti-money laundering sector.
In addition to hampering financial inclusion, Square believes that this law, which it describes as arbitrary, will pose several practical problems.
According to Square, “This proposal will promote innovation and employment outside of United States and regulated institutions. We believe that the work that industry and law enforcement have done and continue to do together has been effective and should be supported and strengthened “
The position displayed by the company recalls that taken a little earlier by Elliptic who had already presented the new law as ineffective. Like other industry heavyweights who have yet to share their thoughts on the matter, Coinbase has asked FinCen to allow more time to get as much feedback as possible.