Coinbase Asks FinCEN to Extend Comment Period for Recent Proposed Crypto Transactions Rule to 60 Days

Coinbase, a U.S. digital currency exchange, unveiled its response letter to the U.S. Treasury and the Financial Crimes Enforcement Network (FinCEN), in which the exchange requested FinCEN to apply the traditional 60-day notice-and-comment period at a minimum to the 72-page notice of proposed rulemaking, "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets", released late Friday afternoon.  

The notice would impose new and onerous reporting and recordkeeping requirements for cryptocurrency transactions. FinCEN asked the public to provide comments in just 15 days, spanning Christmas Eve, Christmas Day, New Year's Eve, and New Year's Day, in the middle of a global pandemic — leaving just a handful of actual working days for comments. 

In the notice, FinCEN asks for comments on 24 separate questions (more than three pages of the notice alone). Based on Coinbase's initial review, responding to those issues will require most companies to undertake detailed technical analyses, extensive costs assessments, and complex balancing of privacy interests for the customers whose personal information would now be required to be turned over automatically to a government agency. Addressing all of the questions FinCEN has posed and the additional issues FinCEN has not yet considered would take much longer than 15 days in the best of times. To do so in a handful of working days across the national holidays and during the latest surge in COVID is quite obviously impossible.

FinCEN has previously expressed a willingness to extend a 30-day deadline for comments to 60 days for a proposed BSA rule "in order to allow interested parties more time in which to comment on the proposals in the "Prepaid Access notice of proposed rulemaking". The same rationale applies even more so in the midst of a global pandemic.

To ensure that Coinbase and other industry stakeholders have a true opportunity to engage in the review and comment process with respect to the proposed rule as the law requires, Coinbase therefore asked that FinCEN reconsider its haste and provide the typical 60-day period for such significant proposed rulemaking.