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Why was the US digital wallet authentication law enacted? 

Why was the US digital wallet authentication law enacted? 

  • 22 December 2020
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Coindesk reported that authentication is mandatory for withdrawing cryptocurrencies from personal wallets in the US. The US Treasury Department has proposed a law that would allow cryptocurrency service providers, including exchange offices, to only allow people to withdraw money from their wallets if they are recognized.

According to the official statement, this institution has submitted a law to higher authorities, which obliges legal exchanges if there are special conditions to authenticate users. This statement is from the Financial Crimes Network (FinCEN), affiliated with the Ministry of Treasury.

What is the US Authentication rule for Digital wallets?

If a person uses an unsecured wallet or a personal wallet and his transaction exceeds $3K, the money exchange must authenticate the person. This law is currently in the proposal stage and will wait for the end of the 15 days for receiving comments.

With the new US administration in office, the Trump administration’s Treasury Secretary will soon be replaced. This law seems to be his last action before leaving. He stated:

“This law is to address national security concerns in the venture capital market. The purpose of this law is to fill the gap that criminals seek to use data history and information monitoring.”

Who is against the US authentication law?

However, some lawmakers have expressed opposition to the proposal. It seems shortly we will see a dispute over the nature of peer-to-peer transactions between US lawmakers. Of course, there are no formal laws in this area, but because the Ministry of Treasury has high legislative power, they can enact their laws in this regard.

Of course, this plan is not as scary as the extremists of the crypto market. They enacted the “Travel Rule”. Under the law, cryptographic service providers had to record customer records.

The current law only extends this restriction to businesses that support certain types of wallets. They set the ceiling at $10K for companies that operate legally.

Why has France enacted authentication for cryptocurrency?

Some other countries, including France, have made authentication mandatory for all crypto transactions. France plans to impose new and stricter restrictions on the field. The reason for this is the recent “terrorist incidents.”

Simon Polrot, the president of the French Cryptocurrencies Association (ADAN) said: “the French Ministry of Finance is preparing a bill that will impose stricter authentication laws on cryptocurrency firms in the country.” This law will also be regulated for (crypto-to-crypto) transactions. In total, several ministries are involved in crypto issues, including the Ministry of Interior as well as the Prime Minister’s Office.

Two other sources, including the CEO (Coinhouse Group) and the Chief Technology Officer (Digital Service Group), have also endorsed the French government’s new moves in the field of crypto. Quinn House provides cryptocurrency trust and trading services in France under the registration of AMF. It is the legislator of the financial markets of this country. Digital Service Group is also in charge of the French cryptocurrency exchange Zebitex. AMF  is currently in the process of licensing Zebitex.

Why has France enacted authentication for cryptocurrency?

What is the law of authentication in France?

In September, two weeks before the attacks, French police arrested 29 people suspected of funding Islamic extremist groups in Syria. They used crypto coins to help these groups.

Polrot said the government should have reacted, taken a stand, and generally done something to show fighting terrorism.

Full authentication of all crypto transactions means that all crypto exchanges and other firms operating in this field, regardless of the volume and amount of transactions, must authenticate their clients.

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