Financial Crimes Enforcement Network (FinCEN) communicated their plan to combat money laundering and add what they feel is missing regulations in the Crypto space back in December.

The summation of the proposal includes tracking all incoming and outgoing transactions over $3,000 through disclosing a name and physical address of the wallet owner. A higher level of oversight on transactions over $10,000 which would be in the form of a Currency Transaction Report.

All of this is targeted at Virtual Asset Service Providers (VASPs), which in our world basically means custodial wallets.  

Fast forwarding to this week, we have a U.S. Senator calling for a reduction on this proposal. Pat Toomey argues that the U.S. cannot afford to fall behind in this technology innovation and the rule itself encourages those who are engaged in illegal activity to simply use less obvious methods of exchange.

Personally, this seems like an accurate assessment. Regulation it seems is far behind the technology and the current proposals would mostly hurt the U.S. economy. While this plays out in the U.S., other countries have already rolled back their regulations in favor empowering their regulators with better tracking methods in existing applications and incentives for self-disclosure.

One country is the Netherlands. They have implemented an easy to understand and lower tax rate on Crypto Currency. Its strategy is to make it easy for citizens to declare their gains and stay compliant with incentivized low rates.