Users of Bitcoin and other so-called cryptocurrencies like to operate under the radar.
Many came to the online currencies because they don’t like the government knowing too much about their financial dealings. That doesn’t mean they are involved in criminal activity. But using conventional banks, security exchanges and even cash in some cases means the federal government knows a lot about you and they just don’t like that.
There are reporting requirements that require paperwork — if you deposit $10,000 or more in your bank account, for example. And if they suspect shady dealings, of course, the government can gain access to your financial records with probable cause and a court order.
Cryptocurrency users say blockchain technology protects them from that. It’s not perfect — there have been online thefts of Bitcoin — but it’s pretty strong.
Well, the feds like to operate under the radar, too, which is why you may not have heard of a proposal to impose reporting requirements on crypto exchanges, currency exchanges and other business that accept or facilitate the use of virtual currencies to collect keep records of transaction, much like banks do now. They would have to report transactions over $10,000 to the government. And make other information available to the feds if ordered to do so.
In a nutshell, federal authorities will essentially make businesses you do crypto business with keep track of your dealings or face legal consequences. It could get a lot harder to use crypto anonymously for anything.
The Treasury’s Financial Crimes Enforcement Network announced the proposal last Friday, without a lot of fanfare. There is a public comment period — it last through the Christmas season until Jan. 4, 2021. Maybe they were hoping everybody would be too busy to notice?
You can read the proposal here https://public-inspection.federalregister.gov/2020-28437.pdf, and if you have anything to say to the Treasury Department about it, better act fast.