Coinbase CEO Brian Armstrong, in a series of tweets, has suggested new regulations require Bitcoin and other digital asset transactions to be sent only to ID-verified wallets. Armstrong suggested this based on “rumors” he had heard. Though it’s hard to see how such a law would work, it’s a reminder that governments remain very keen to track all crypto transactions, no matter what platform they’re on. Coinbase CEO didn’t mention where he’d heard the rumors, and therefore no specific details are available on the reportedly-proposed regulations and what they are about.
Coinbase CEO thinks the proposed regulation would require them to verify self-hosted wallets.
Brian Armstrong tweeted, “this proposed regulation would, we think, require financial institutions like Coinbase to verify the recipient/owner of the self-hosted wallet, collecting identifying information on that party before a withdrawal could be sent to that self-hosted wallet.” The CEO offered his opinion based on the notion that Coinbase and similar companies would need to verify recipient addresses before performing a withdrawal, even if the address belonged to a self-hosted wallet.
This proposed regulation would, we think, require financial institutions like Coinbase to verify the recipient/owner of the self-hosted wallet, collecting identifying information on that party, before a withdrawal could be sent to that self-hosted wallet.
— Brian Armstrong (@brian_armstrong) November 25, 2020
Brian Armstrong showed concern if these regulations are implemented.
In his series of tweets, Coinbase CEO added a possible concern that some users who withdraw funds from Coinbase directly to smart contracts, e.g., DeFi apps. Again, though, that would probably just necessitate an extra transactional step for customers (and, if using BTC, additional high fees). Armstrong’s concerns about sending more and more ID documents and information to services that could be hacked are legitimate since ID theft is a very real problem, and companies have a poor record of protecting such personal data.
Earlier, the Coinbase CEO had published a post revealing that the US-based company would not engage in politics and focus on improving technology. He faced a backlash from the crypto community for his apolitical stance.