{"id":114898,"date":"2020-11-18T22:00:44","date_gmt":"2020-11-18T19:00:44","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/crypto-lobby-defends-self-hosted-wallets-and-p2p-from-rumored-govt-crackdown\/"},"modified":"2020-11-18T22:00:44","modified_gmt":"2020-11-18T19:00:44","slug":"crypto-lobby-defends-self-hosted-wallets-and-p2p-from-rumored-govt-crackdown","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/crypto-lobby-defends-self-hosted-wallets-and-p2p-from-rumored-govt-crackdown\/","title":{"rendered":"# Crypto lobby defends self-hosted wallets and P2P from rumored gov’t crackdown"},"content":{"rendered":"

“# Crypto lobby defends self-hosted wallets and P2P from rumored gov’t crackdown <\/strong>”
\n<\/p>\n

Major players in U.S. crypto lobbying are coming out in defense of non-custodial wallets.<\/p>\n

On Tuesday, the Blockchain Association released a new report<\/a> presenting policy options for self-hosted wallets to regulators. On Wednesday, Coin Center published an expert view<\/a> by Jai Ramaswamy, also defending such wallets. <\/p>\n

The Blockchain Association is a trade organization for the crypto industry, while Coin Center is a non-profit focused on defending decentralization before policymakers. Both are based in Washington, D.C.<\/p>\n

Ramaswamy currently works on compliance for Celo parent company, C Labs, and was formerly the head of the Department of Justice\u2019s anti-money-laundering (AML) division. His piece focused on the role of the Bank Secrecy Act in crypto and increased regulatory anxiety over decentralized finance and peer-to-peer (P2P) transactions. These areas lack the intermedia<\/a>ries that regulators pressure to keep financial data. <\/p>\n

Ramaswamy and the Blockchain Association agree that efforts to enforce AML are best suited to crypto-to-fiat on and off-ramps \u2014 typically exchanges. Using the Financial Action Task Force\u2019s term VASPs, or virtual asset service providers, the Blockchain Association points to them as the real area of concern:<\/p>\n

\u201cBecause non-compliant entities that are already subject to the global AML\/CFT regime \u2014 namely non-compliant OTC brokerages and exchanges \u2014 represent the greatest \u2018hole\u2019 in the AML\/CFT regime in the digital asset ecosystem, additional restrictions on self-hosted wallets would not address the substantially greater risk posed by non-compliant VASPs.\u201d<\/p><\/blockquote>\n

Ramaswamy predicted that any attempt to restrict self-hosted wallets in the name of AML would ultimately flounder:<\/p>\n

\u201cA sober review of the technology<\/a> explains why such efforts are bound to fail and will only serve to undermine rather than enhance efforts to detect and disrupt illicit financial activity.\u201d<\/p><\/blockquote>\n

The Blockchain Association\u2019s report identified three potential policies that regulators could enact to combat P2P wallet transactions: <\/p>\n

\u201cBanning or denying licensing of platforms if they allow unhosted wallet transfers, introducing transactional or volume limits on peer-to-peer transactions or mandating that transactions occur with the use of a VASP or financial institutions.\u201d <\/p><\/blockquote>\n

But, like Ramaswamy, the folks at the Blockchain Association are skeptical of actual technical implementation. Miller Whitehouse-Levine, the association\u2019s policy manager, told Cointelegraph: \u201cLimiting peer-to-peer transactions (self-hosted to self-hosted) would require changes to underlying protocols.\u201d Executive director Kristin Smith followed up, saying \u201cThe fear is that the only way to implement them will be to cut off transactions to and from self-hosted wallets and hosted wallets.\u201d<\/p>\n