Comment
Author: Admin | 2025-04-28
The first action listed is that “Section 1010.660(b)(1) of the proposed rule imposing the special measure would prohibit covered financial institutions from establishing, maintaining, administering, or managing in the United States any correspondent account for or on behalf of a foreign bank if such correspondent account is being used to process transactions involving Liberty Reserve, including any of its branches, offices or subsidiaries.” However, especially in the context of the Notice of Finding, the Bitcoin Foundattion is concerned that “although the special measures contemplated by the Proposed Rule are explicitly targeted at Liberty Reserve, many of the statements in the Proposed Rule and Finding could be misread to apply more broadly to transactions involving virtual currencies generally.”The core arguments that the letter makes are the following:Maintaining consistent definitions is important. Quoting the letter: “For example, the Finding describes Liberty Reserve as a “web-based money transfer system, or ‘virtual currency.’” In doing so, FinCEN infuses virtualcurrency with a new definition – namely, a web-based money transfer system. This definition of virtual currency is inconsistent with the definition FinCEN issued in its March 18, 2013Guidance … By equating virtual currency with “web-based money transfer system” in the Finding and the Proposed Rule, FinCEN risks muddying the analysis required byits own Guidance.” The letter instead recommends that FinCEN use its own language from its own March 18 guidance, perhaps calling Liberty Reserve the administrator of a centralized virtual currency system.Anonymity is not necessarily criminal. Once again from the letter: “The Finding and Proposed Rule broadly state that ‘Liberty Reserve’s system is structured so as to facilitate money laundering and other criminal activity,’ and cite, among other things, theanonymity of the system as evidence of that illicit structure. The Bitcoin Foundation is concerned about the broad use of the term ‘anonymous’ and about FinCEN’s generalcharacterization that all ‘anonymity’ is designed to facilitate money laundering and other criminal activity.” Here, the foundation is taking a brave turn, not taking the usual strategy of defending Bitcoin by claiming that it is not anonymous, but rather arguing that even anonymity itself is not necessarily criminal. This is a highly beneficial strategy for Bitcoin advocacy going forward; if Bitcoin becomes more anonymous in practice through developments like Zerocoin or decentralized mixers, the defense that “Bitcoin isn’t that bad” may not cut it anymore. Questioning what is bad in the first place, on the other hand, stands a solid
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