Crypto Privacy Fight: Banks Want DeFi in the Reporting Net

On Nov. 6, the Bank Policy Institute, which represents U.S. and foreign banks, urged FinCEN and OFAC to classify digital-asset service providers and those who operate or control decentralized finance arrangements as financial institutions under the Bank Secrecy Act. The request followed three FinCEN crypto-related withdrawals since October, including a Nov. 6 decision with the Federal Reserve to abandon a 2020 plan that would have lowered the cross-border recordkeeping threshold from $3,000 to $250; the $3,000 trigger remains when the withdrawal takes effect Nov. 9. BPI argues the withdrawals left no replacement duties on crypto intermediaries, which it says hold customer, wallet and transaction records that banks cannot see.