The nonpartisan and nonprofit civil rights group New Civil Liberties Alliance (NCLA), filed its complaints against the US Treasury at the beginning of the week, as it objects to the proposed rule of FinCEN, entitled “Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets.” FinCEN (The Financial Crimes Enforcement Network) represents a bureau of the US Treasury Department.
The NCLA declared:
“The U.S. Treasury Department’s planned ‘crackdown’ on cryptocurrency holders’ private wallets is an unconstitutional power grab … The proposed rule represents a radical — and unlawful — extension of FinCEN’s financial surveillance.”
The group describes FinCEN’s proposal as being a “large-scale state intrusion into private digital transactions,” claiming that the “unlawful requirements … would lead to a massive collection of people’s personal information” and would “likely force privacy-sensitive digital assets out of the U.S. banking system.”
The NCLA explains that according to this proposal, “digital assets would fall into the ‘monetary instruments’ category of regulated currencies.” Basically, private data of crypto users would have to be collected as mandated by the Bank Secrecy Act’s (BSA) record-keeping and currency transaction reporting requirements.
The group also claims that the proposed rule of FinCEN “sets in motion a chain reaction of personal information mandatory disclosure.” This means that if a financial institution makes a transaction worth more than $3,000 in crypto with a person, even in the case that the individual is using an unhosted wallet, detailed records must be kept from both the customer and the counterparty.
The NCLA highlights the fact that “Even existing BSA requirements for traditional banks do not require this level of disclosure about counterparties.” It also mentions that “The proposed rule exceeds appropriate constitutional limits by empowering FinCEN to exercise Congress’ exclusive legislative power.”
It also argues that “the proposed rule violates the Fourth Amendment by extending the BSA’s reach to require the production of sensitive financial information from those who have never voluntarily disclosed it to a financial institution, and who, like cryptocurrency owners, have been excluded from the BSA’s reach.”
The group mentioned that “It would unconstitutionally require disclosure of private information to law enforcement without any suspicion of wrongdoing.”
Caleb Kruckenberg, the NCLA’s litigation counsel, commented:
“FinCEN’s proposed rule unlawfully attempts to transform the agency’s limited authority to regulate banks into permission to engage in the mass financial surveillance of innocent individuals who merely use digital assets. FinCEN ought to recognize that its proposal would be grossly unconstitutional and promptly scrap this rule.”
Source: Bitcoin.com