Twitter CEO Jack Dorsey recently laid out his opposition to proposed cryptocurrency regulation, stating that it would create “perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions.”
The Verge reports that Twitter CEO Jack Dorsey recently expressed his opposition to proposed cryptocurrency regulations which he believes will hurt his payment processing company Square and create “unnecessary friction and perverse incentives for cryptocurrency customers to avoid regulated entities for cryptocurrency transactions.”
Square purchased $50 million in bitcoin in October and has moved heavily into the cryptocurrency sector in recent months. A new regulation proposed by the Financial Crimes Enforcement Network (FinCEN) would require financial institutions such as Square to collect personal information about the parties involved in cryptocurrency transactions. More information on these regulations can be found here.
The regulations propose that financial institutions collect the name and physical address of both parties of any large transaction that they’re involved in. The regulation is aimed at preventing the illegal use of cryptocurrencies for crimes such as drug trafficking, money laundering, and “international terrorist financing.”
Dorsey claims in a letter that the regulation would create “unnecessary friction” between cryptocurrency users and financial institutions leading to “perverse incentives.” Dorsey stated:
To put it plainly — were the [regulations] to be implemented as written, Square would be required to collect unreliable data about people who have not opted into our service or signed up as our customers.
Dorsey included an example in his statement, asking readers to imagine a parent uses Square to send their daughter $4,000 in bitcoin. Even if the daughter is using a private bitcoin wallet on her own computer, Square would then be forced to collect her personal information including her physical address.
Dorsey and many privacy advocates see this as a privacy overreach particularly given the open nature of blockchain systems. Dorsey further argues that the regulation could drive customers “to use non-custodial wallets or services outside the U.S. to transfer their assets more easily,” leading to FinCEN having “less visibility into the universe of cryptocurrency transactions than it has today.”
Dorsey further added that it hampers innovation, writing: “The burdensome information collection and reporting requirements deprive U.S. companies like Square of the chance to compete on a level playing field to enable cryptocurrency as a tool of economic empowerment.”
Dorsey’s letter was submitted as part of an unusually short comment period for the regulation. The standard public comment period for these policies is 60 days but the comment period for this proposal is just 15 days. The Treasury Department’s reasoning for this is due to “significant national security imperatives.”
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com