As the cryptoworld focused on the drama unfolding around FTX, United States Sen. Elizabeth Warren and Sen. Roger Marshall introduced the \u201cDigital Asset Anti-Money Laundering Act of 2022\u201d on Dec. 14. The seven-page bill would expand the classification of money service business (MSB), prohibit financial institutions from using technology such as digital asset mixers and regulate digital asset kiosks, otherwise known as automated teller machines (ATMs).<\/p>\n
Announcing the introduction of the bill at the Senate Banking Committee hearing on \u201cCrypto Crash: Why the FTX Bubble Burst and the Harm to Consumers,\u201d Warren, a vocal crypto critic, said:<\/p>\n
\u201cSenator Marshall and I introduced a bipartisan bill today that requires crypto to follow the same money-laundering rules as every bank, every broker and Western Union all have to follow today.\u201d<\/p><\/blockquote>\n
Under the legislation, money service businesses, a classification created by the Financial Crimes Enforcement Network (FinCEN), would be \u201ccustodial and unhosted wallet providers, cryptocurrency miners, validators, or other nodes who may act to validate or secure third-party transactions, independent network participants, including MEV [maximum extractable value] searchers, and other validators with control over network protocols.\u201d <\/p>\n
Unhosted wallets, miners and validators were not previous considered MSBs.<\/p>\n
Money service businesses would be required to have written Anti-Money Laundering (AML) policies and to implement them. The bill would finalize reporting requirements already proposed by FinCEN and impose new requirements, including reporting transactions over $10,000 in accordance with the Bank Secrecy Act.<\/p>\n
The bill also instructs the Treasury Department to create a rule banning financial institutions from interacting with \u201cdigital asset mixers, privacy coins, and other anonymity-enhancing technologies.\u201d <\/p>\n
It would require the Treasury Department, Securities and Exchange Commission and Commodity Futures Trading Commission to set up review processes of the entities each regulates. <\/p>\n
Finally, the bill would create reporting requirements for owner of digital asset kiosks and for FinCEN and the Drug Enforcement Administration. <\/p>\n
Related: Institutional crypto adoption requires robust analytics for money laundering<\/em><\/strong><\/p>\nSomewhat like the duo of legislators Cynthia Lummis and Kirsten Gillibrand, authors of the Responsible Financial Innovation Act , Warren and Marshall represent opposite ends of the U.S. political spectrum. Warren, a liberal Democrat from Massachusetts, while Marshall is a conservative Kansas Republican.<\/p>\n
\u201cI am delighted to see Senator Warren acting in a bipartisan manner by joining with Senator Marshall in the introduction of this bill,\u201d Patrick Daugherty, head of Foley & Lardner\u2019s digital asset practice and adjunct professor of digital assets at Cornell Law School, told Cointelegraph in a statement. <\/p>\n
Daugherty acknowledged the bill\u2019s \u201csalutary effect of impeding more thoroughly the abuse of digital assets for crime,\u201d but expressed concern about \u201cthe loss of financial privacy for millions of digital asset buyers and sellers who are not criminals.\u201d<\/p>\n
Casey Jenkins, Seward & Kissel counsel and former Consumer Financial Protection Bureau staffer, told Cointelegraph the bill could have \u201csweeping ramifications\u201d for MSBs. The prohibition of institutions from interacting with digital mixers, defined in the bill as \u201ca website, software, or other service designed to conceal or obfuscate the origin, destination, and counterparties of digital asset transactions,\u201d would amount to a ban on mixers and privacy coins.<\/p>\n
The requirement that miners and validators do due diligence is also potentially problematic. \u201cMiners and validators are not equipped to perform the new duties that this legislation would thrust upon them. They aren\u2019t banks or brokers, which are already staffed up for this function,\u201d Daugherty said. <\/p>\n
The bill seemed to be \u201cthrown together at the last minute,\u201d Jenkins said, and intended to \u201cset the tone\u201d for further discussion in Congress. It has no chance of being considered in this session. <\/p>\n
Warren has also promised to write comprehensive crypto regulation legislation that reportedly would favor the SEC in the role of regulator. <\/p>\n
Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"As the cryptoworld focused on the drama<\/p>\n","protected":false},"author":3,"featured_media":168387,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\n
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