This is just one of the issues… and why the regulation would be very difficult and tie the hands of alot of exchanges and fiat on/off ramps. Users doing P2P trades wouldn’t be able to do this verification, and would only find out when they went to convert to fiat… this regulation would be very hard on DeFi products in general.
Possible New Regulation around Self Hosted Wallets for US
I say burn all the FIAT! Make it a crypto only world lmao.
I believe this will be the natural progression over time anyways. Provided we don’t get hit with massive solar flairs that bring us back to a pre-electronic tech era.
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Good mo! Count how many people in USA and how many in the world? And how many rich us citizens are not transnational? I don’t think this could affect anything. There’s just fear (a little, no more, that makes it fluctuates). Then ask who owns all theses big news websites and papers? They are in war with word citizens to keep the power. But remember this power to people give greats responsabilities. Without taking care of the weakest of us, there’s no more dream. And the dream makes the price.
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I think even if this were true tomorrow, regulation will relax. Real money is finding its way into the crypto world. Especially with btc. As more people with real money start adopting this “fake money, but we still want a take for the government anyway”, you’ll see regulations relax again. It just needs to benefit the rich before they start sending in lobbyists. True American capitalism. #HODL
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My two Satoshis,
Onchain batering systems could still get around this. There is a service where you have others buy things for you on amazon and you pay them back in btc. I wish we could get Craigslist fully decentralized and interfaced somehow with incognito, an incognito peacecoin would be rad.
Its a pain but all it would do is grow a black market for a decade. Like liquor, or gold coins, and then at some point it would be legit again.
I do think that this would not be an overnight change if it did happen, and I also agree with some of the remarks made by @Thriftinkid, just looking at Coinbase alone, their institutional investors are increasing dramatically, increasing their total assets under management by $14B in 6 months to a total right around $20B… thats a massive influx of investor money coming from US institutions, this alone is probably enough to slow down regulation to where it will not hurt the large money centers that are dropping cash into BTC.
This article by the form DOJ AML chief shows their are opposing views to this type of regulation (https://www.coincenter.org/how-i-learned-to-stop-worrying-and-love-unhosted-wallets/), but I also know this piece was written specifically to counter this report and help lobbyist have a counter narrative to use.
Andrey also pointed me to this video a while back which shows some of the information from the report and its effects and the timeline to implement something like this (and the difficulty to do so)… it is worth the watch if you have time and are interested in regulation in US.
Finally, I talked with some people from the Netherlands last night about how this regulation was implemented and what hoops they had to jump through to work with it, and it essentially boiled down that exchanges would white list 1 address per coin for an individual, and that individual would have to prove that address belonged to them. They did not track where the coins had come from prior to that wallet address, so the coins could have come from any source. XMR specifically was not allowed to leave or enter exchanges, because of its not tracking capability… but they could trade XMR on the exchange. A user could hold XMR, trade it on a DEX to a different coin, then bring into a centralized exchange though.
To me, if this was implemented similarly in the US, it would just be a burden for the exchanges, and you would just need at least 2 self custodial wallets… one would be an extension of where you took coins on/off central exchanges the other would be your “real” wallet. The KYC wallet would essentially become just an extension of the central exchanges, but under your individual control.
I don’t think that would be a killer and would be easiest enough to work around (and in the end, pretty pointless of a regulation as it only adds overhead but doesn’t really change anything). I also agree with the Unchained Podcast episode that this would take some time to implement and would not be happening anytime soon… although, if it was passed, I imagine there would be somewhat of a dip on prices, but they would eventually bounce right back… too much money is already involved, with institutions already making too much money for the government to destroy it (IMHO)… its one thing to cripple the average person, but usually large financial institutions and companies are able to ensure their revenues are not completely tanked by new regulations like this.
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My Satoshi comment on this matter is this…for one all the comments were excellent…Thriftinkind, Doc, Revolve. and MW…interesting points were made by each author…their might be some form of regulation at some point but the likelihood of anything happening in very near future is doubtful. Though Janet Yellin if confirmed as Treasury Secretary is not a big fan of Crypto the new administration has bigger fish to fry once they take over from the current administration…bottom line it’s something to keep an eye on from time to time but nothing to lose sleep over at present… 
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Agreed. @Tempestblack. I’ve always proposed my approach in any crypto as questionable. Im a conservative investor. That was just an in my face big no lol. Im a #hodl
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This topic is about anyone owning a private key when they describe “self hosted wallet” so its important to understand this is such a broad range and basically is not enforceable. Yes incognito app is called incognito wallet but we really aren’t a wallet service , its a dex. So important to understand services like incognito are not the ones in regulators cross eyes when it comes to this topic although it would be a good idea to not send directly from an exchange without a few hops in between.
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Just another one of the reasons I’m leaving the “land of the free.” Americans in 2020 have begged for more government control of their lives. Alternative currencies that pose a better option than Monopoly money of course won’t be supported.
Even if it doesn’t happen soon, it will eventually. Americans want to give more power to the oligarchs.
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@Matt6412 I agree that it will be impossible to stop, but I don’t think the issue is really wether or not it is possible, but wether or not it is legal. While it would be impossible to enforce a regulation that prevents someone from holding an unknown private key (“wallet”), the real issue is wether or not businesses can operate with with customers who have them.
This is also something that Brian brought up in his tweets (https://twitter.com/brian_armstrong/status/1331744884856741888?s=20). The real issue is the stifling of innovation that would come from something like this, if it reached beyond just exchanges that were fiat on/off ramps. If every day businesses that used crypto for tips (Brave browser, publishing platforms) or the general tokenizaiton of real world objects starts to really become a problem. IMHO, the real issue is if something like this would take hold that prevented anyone from doing legal business activities without first KYC’ing a wallet, that would be incredible over burdensome and would essentially stop the crypto innovation that is happening in US… it wouldn’t stop crypto, and it wouldn’t stop innovation, but it would greatly hamper the ability for US businesses to participate. This was one of the final thoughts from the former DOJ AML chief as well.
I don’t think it’s an issue of “stopping crypto” or “its not enforceable”, but if the US makes it where legitimate businesses can’t operate with this in place, then that is the real problem. But again, as I stated above… I don’t think this is on the immediate horizon, and if the government only locks this to exchanges and if it had a similar implementation as Netherlands, I think the total impact will be minimal and pretty much pointless.
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Thank you Doc for conveying what Basically is the issue with this proposed regulation and I agree with you that implementation of such a regulation will be harder to enforce…
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Also good to note if such regulation ever came about. incognito app would have to pull itself off the Google play and iTunes store and rely on github repository to distribute downloads…also would be advisable to have tor integration so there is plausible deniability built in, along with multiple hops on incoming and exiting shields (I suppose 4 hops would be considered safe?). Pulling app off play store and iTunes makes it so you aren’t marketing to usa users as this is what would have to be done primarily to avoid fincen violations
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I don’t know if you guys have seen this,
but: https://cointelegraph.com/news/us-lawmakers-seek-to-make-stablecoins-illegal-without-federal-approval
US bill was was introduced to congress to regulate stablecoins, making it illegal to use without government approval.
Dubbed “The Stable Act,” the bill is intended to “protect consumers from the risks posed by emerging digital payment instruments, such as Facebook’s Libra and other Stablecoins.”
That’s some next level FUD right there. Well … maybe it’s warranted for Libra Diem because Zuck 'n FB, but … lolwut … regulated stablecoins. Get bent.
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This seems really odd now that Visa is coming on board to support stablecoin transactions…
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To me, it makes complete sense. The government want’s to have it’s own stablecoin that the they can regulate all they want. I don’t think they want any competition when it comes to USD on the blockchain. If they need government approval for stablecoins, I think Visa will 100% get government approval for processing government issued stablecoins. It seems like they are trying to give the big banks and big processing companies the reigns when it comes to crypto. They want to delegate the potential power directly to the big companies that already have it, cause as you know, money controls the government and these companies have large amounts of money.
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They will try to protect there precious USD aka tool of power with a lot of dirty moves. But in the end we will win no matter what. This is nice short article which shows, that it always happens this way 
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Hi Sato…an excellent article you shared in your post…I especially liked how the author of the article displayed various technologies in their strong and weak forms…and indeed a very strong argument he makes about how in the long run those who are visionaries and intrepid about the strong form of whatever technology they be proponents for…are the ones that wind up being the pioneers and trendsetters in the long run…so yea…I say to them so called gov’t regulators…“Regulate this buddy…hehehehe”… 
Thanks you @Tempestblack. Yes I also like this article. Short but wise. As more they regulate as more we will push the technology and decentralize more and more. The next 10-20 years will be huge, I really believe that we will have a much better world thanks to the blockchain / decentralization. So many ideas will come up for much better governance and the small minority who tries to control everyone around, will loose all of their power. It’s is going to be a wonderful world, where everyone is really free and can be creative, come up with cool ideas which benefit to everyone instead only being a extreme profitable money business. Instead most of us will wake up and our thoughts during the day are not going to be, how can i make money out of this and that.
Instead we would be able to question our self what will bring the most value for me, my family, friends our the whole mankind, earth etc. Once you have a cool idea, you make a proposal on some cool defi platform and will hopefully find funding within hours. Many people around the world who like your project idea, will fund raise you. Each just with a few bucks maybe and get so a small share on your project. No more wall street gangsters, who only look for short term profits, which only leads to wars, data collection, extreme expensive medical sector etc.
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