TechFlow reported, according to The Block, that in comments submitted Monday to the Treasury Department's Financial Crimes Enforcement Network (FinCEN), Coinbase stated the Treasury’s proposed rulemaking on cryptocurrency mixing fails to adequately address regulatory gaps while demanding unnecessary data and resources from regulated platforms. Regulated crypto platforms are already required to record and report suspicious activities and illicit cryptocurrency mixing; however, mandating reporting of all cryptocurrency mixing activities—including those with legitimate purposes—is not an efficient use of company resources. The filing also questioned the lack of a monetary threshold for recordkeeping and reporting requirements.
Coinbase Chief Legal Officer Paul Grewal wrote in a post on X that the absence of a monetary threshold would “only result in massive reporting of non-suspicious transactions.” Grewal said: “Congress has indicated that this kind of data dumping is a waste of time and resources.”
Grewal added in the X post: “If the Treasury wants to focus on this issue, they should help exchanges fulfill their existing obligations by reporting suspicious activities involving mixers. This is what the Treasury does elsewhere—specific guidance is more effective than mandatory bulk reporting rules.” Given these concerns, Coinbase recommended that FinCEN implement a threshold to eliminate bulk reporting of small-value transactions. Coinbase also suggested requiring recordkeeping only, rather than reporting, to mitigate privacy and security risks.
