The Biden administration plans to keep a close eye on Bitcoin’s rise in the market. Gary Gensler, Biden’s pick to chair the Securities and Exchange Commission, at his confirmation hearing on Tuesday said the SEC under his watch would ensure cryptocurrency markets “are free of fraud and manipulation.”
Last week, Yellen echoed some of the fears expressed by her predecessor, Steven Mnuchin.
“I don’t think that Bitcoin -- I’ve said this before -- is widely used as a transaction mechanism,” said Yellen at an online event hosted by the New York Times’s DealBook. “To the extent it’s used, I fear it’s often for illicit finance.”
Regulators have long been wary that virtual currencies are used to skirt sanctions or finance terrorism. Crypto exchange Coinbase in a securities filing last week disclosed that it had responded to subpoenas and voluntarily disclosed information on some transactions to the Treasury’s sanctions enforcement agency.
Mnuchin personally pushed hard to try to ensure that the new rules would be in place before the end of the Trump administration, despite the hesitancy of some staff members inside FinCEN, said two people familiar with the matter. Mnuchin said in response to a request for comment that the interim rule was supported on an interagency basis. He said he briefed Yellen on the proposal as she took over the department. A Treasury spokesperson didn’t respond to requests for comment.
Now, virtual-currency associations and executives are trying to convince FinCEN staff to eliminate parts of the rule, said the Blockchain Association’s Smith, adding that they are unsure when Yellen or other Biden appointees will decide how to proceed.
Beyond lobbying, organizations like Fight for the Future are holding public events on Reddit and YouTube to try to convince more virtual-currency enthusiasts to weigh in and run up the comment-count at FinCEN even more.
“We’re trying to spread the news so people recognize the gravity of the situation,” said Peter Van Valkenburgh, director of research at Coin Center, a nonprofit virtual currency advocacy organization.
This article was provided by Bloomberg News.