Coinbase CEO Warns of 'Rushed' Wallet Regulation Bitcoin Drops Below USD

The CEO of US-based major crypto exchange Coinbase, Brian Armstrong, caused quite a stir in the Cryptoverse when he warned that the outgoing Trump Administration is still not done with crypto regulation, possibly dealing it a massive blow as they exit the White House. Some speculate that this is exactly what prompted the selloff in the markets we're seeing this morning. On Wednesday night (UTC time), Armstrong tweeted that per some rumors heard last week, the US Treasury Department and Treasury Secretary Steven Mnuchin "were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term," adding that he's "concerned that this would have unintended side effects." Coinbase laid out their concerns in a letter they sent to the Treasury last week, he said. The CEO started his list of concerns by explaining first that self-hosted crypto wallets, or non-custodial / self-custody wallets, are a type of software that enables each individual to store and use their own crypto without relying on any third-party financial institution. In the Coinbase team's opinion, the proposed regulation would not allow a withdrawal to be sent to a self-hosted wallet before financial institutions like exchanges verify the recipient and the owner of that self-hosted wallet and collect their identifying information. They'd also have to keep track and logs of transactions, movements, and other data. This would mean touching at the very basis of crypto: freedom and ability for an individual to hold their own money. Armstrong argues that it's "often impractical to collect identifying information on a recipient in the cryptoeconomy." The reasons are that many crypto users:The regulation that goes against this and still requires an extremely difficult or impossible task to be completed would be very damaging for crypto, stated the CEO. Not only would it destroy crypto uses cases, but Armstrong finds there'd likely be fewer transactions from crypto financial institutions to self-hosted wallets, which would cut the US off from innovation happening in the rest of the world, and would as a result have US consumers using foreign unregulated crypto companies, which "long term, I believe this would put America's status as a financial hub at risk."Lastly, the CEO called the government to embrace the open crypto network as they did the open internet. As this news came out, however, some in the Cryptoverse started speculating if this is what might've "killed" the bull run. On Thursday morning (8:51 UTC), following a strong rally, the market has turned red in the past 24 hours. Bitcoin (BTC), which was headed towards its all-time high, dropped nearly 13% in a day and 4.5% in a week to USD 16,718. Similarly, ethereum (ETH) fell 17.5% in 24 hours and appreciated 4.8% in a week, currently sitting at USD 493, quite far from USD 621 it reached earlier this week.


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