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Andreessen Horowitz published a strongly worded letter denouncing a proposed change to how the government regulates crypto wallets.
The rulemaking proposal by the Treasury Department's Financial Crimes Enforcement Network (FinCEN) would require crypto companies to collect and report detailed, personally identifiable information about their customers' counterparties, which other types of financial firms are not required to do, the firm said. "Such an ill-advised regulation will have many foreseeable and unintended negative consequences."
Others in the industry such as Square and Coinbase have also come out against FinCEN's proposal. The proposal, released at the tail end of the Trump Administration, comes as the crypto industry looks to the new Biden administration for signs of how it will regulate the crypto industry.
The proposed rules were published in the Federal Register on December 23, 2020, and required comments be submitted by Monday, January 4, 2021. Kathryn Haun, general partner at Andreessen, pointed out that that was only six business days and called for at least 60 days for all parties to comment. Haun said on Twitter that if the rule goes forward, her firm would join others in challenging it in court. "There's a phrase in the law, 'arbitrary and capricious,' & that's what we think this proposed rule is," she wrote.
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at email@example.com or firstname.lastname@example.org.