US Lawmakers Appeal the Treasury Secretary & SEC to Not ‘Hinder American Leadership’ in Crypto Space

Four US lawmakers, Warren Davidson (R-Ohio), Tom Emmer (R-Minnesota), Scott Perry (R-Pennsylvania), and Ted Budd (R-North Carolina), sent a letter to Treasury Secretary Steve Mnuchin, “expressing our concern” about the rumored self-hosted wallet regulations.

Last month, Coinbase CEO Brian Armstrong tweeted that Mnuchin was “planning to tush out” new regulations that will require KYC for these wallets.

According to the letter, Mnuchin’s potential regulation would “hinder American leadership,” threaten user privacy, and “undermine the Treasury Department from stopping illicit actors from exploiting the financial system.”

Regulating self-hosted wallets might have the unintended effect of making anyone who uses them into a criminal, the letter said.

The US should have “regulatory parity” between the crypto ecosystems and the traditional financial system, it further added.

“Over-regulating self-hosted wallets will crush a nascent industry and leave the United States behind the rest of the world when it comes to harnessing the power of blockchain and cryptocurrency,” said Davidson in a statement published online where he asks Mnuchin to appear in the Peoples’ House and talk about what these regulations would do.

Regulated safekeeping of Crypto Assets

The same day, nine Congress members sent a letter to Securities and Exchange Commission Chairman Jay Clayton, asking the securities regulator to create clear guidelines on cryptocurrency custody and enable FINRA to approve broker-dealer applications.

The letter mentions that strong financial markets attract investment and serve as the foundation for a healthy economy, and adopting innovative technologies will only improve the functioning of securities markets. The letter says,

“Following the OCC’s lead, the SEC and FINRA should address the need for regulated safekeeping services for cryptographic assets.”

The congress members want the SEC to explicitly confirm that banks may act as good control locations for the custody of digital securities, advise FINRA on the requirements for broker-dealers to be able to custody digital securities for their customers, and instruct FINRA to approve broker-dealer applications that meet the necessary requirements.

“Doing so would greatly increase the uniformity and efficiency of safekeeping mechanisms for all security types, resolving uncertainty and creating an environment for the digital securities industry to flourish.”

Clayton is to step down from his role at the end of this year.

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