ErisX Submits Response to FinCEN proposed NPRM

  • Reliance on self-reporting of ownership information is likely to result in deliberately inaccurate ownership information reported for unhosted wallets that are used for legitimate purposes and are reported accurately.
  • The NPRM, if implemented as drafted, will result in multiple sources (Banks and MSBs) reporting a treasure trove of information (with low reporting thresholds) to a single destination, where it is susceptible to cyber attack, leakage, or digital intrusion or hacking.
  • The costs associated with compliance with the NPRM are likely to be significant, especially for small entities that make up a majority of this developing industry; including software development costs for proprietary software; increased storage costs; increased vendor costs for updated software, alerts, storage, reporting; and overall costs for unanticipated fines.
  • If the approach undertaken in the NPRM is not adopted internationally, participants in this global industry will utilize markets in less intrusive jurisdictions and innovative entities will also establish in less restrictive jurisdictions to avoid the increased costs of compliance and stifling regulation.

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