Biden freezes all federal regulatory proposals, including Mnuchin’s controversial crypto wallet legislation, until his new administration can review them

• Joe Biden halted all last-minute rules from Trump’s administration, including those for cryptocurrency.
• Hours after Biden’s inauguration ceremony, the order was circulated in a memo to all federal agencies.
• Controversial crypto regulations proposed by Steve Mnuchin on December 18 were met with criticism.
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President Joe Biden has frozen all federal regulatory proposals, including former Treasury Secretary Steve Mnuchin’s proposed rules on self-hosted crypto wallets, until his new administration can review them.

Biden asked his chief of staff, Ron Klaine, to communicate the order to all federal departments and agencies in a memo Wednesday. Except for emergency situations, any proposed rules should be halted and any sent to the Office of the Federal Register should be immediately withdrawn, Klaine said.

The US Treasury, under Mnuchin, announced proposed rules in December requiring registered crypto exchanges to verify the “identity of their customers, if a counterparty uses an unhosted or otherwise covered wallet and the transaction is greater than $3,000.” 

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Under the proposed rules, users of such crypto exchanges who wish to move their holdings into private, or self-hosted wallets, would be required to provide detailed personal information for transactions over $3,000. These exchanges would also have to report transactions valued at more than $10,000 to the Financial Crimes Enforcement Network, or FinCEN. 

A 15-day public comment period for the rule was proposed initially, but this was extended following backlash from crypto groups and companies. Critics pointed out that the proposed rules threaten crypto innovation and privacy rights of individuals and entities that transact in cryptocurrencies. 

Biden’s freeze on new regulatory proposals seems to be a welcome move for some crypto advocates.

“We fought hard & earned the right to take a breath & reset,” Jake Chervinsky, the DeFi Group co-chair at the Blockchain Association said in a tweet. “Janet Yellen isn’t Steve Mnuchin. I’m optimistic.”

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