The Digital Asset Anti-Money Laundering Act, championed by Senators Elizabeth Warren, Roger Marshall, Joe Manchin, and Lindsey Graham, is gaining momentum among US lawmakers. Designed to bolster cryptocurrency regulations with a focus on anti-money laundering (AML) and counter-terrorism financing (CFT), some experts have raised concerns, labeling it a significant intrusion on the privacy and freedom of cryptocurrency enthusiasts.
Initially introduced by Senator Warren in December and reintroduced in July, the bill has since attracted the support of nine other US Senators, including figures like Catherine Cortez Masto and Gary Peters. The legislation seeks to place crypto firms under the same regulatory framework as traditional financial institutions, aiming to curtail illegal activities financed via cryptocurrencies. As Senator Cortez Masto articulated, the objective is to hold cryptocurrency entities to the same standards as banks and shut down any pathways criminals may exploit.
Several prominent organizations, ranging from the Bank Policy Institute to AARP and Transparency International U.S., have endorsed the bill, emphasizing the urgent need to refresh the existing AML guidelines and the Bank Secrecy Act to encompass digital assets.
The bill’s key provisions entail broadening the scope of the Bank Secrecy Act to entities within the crypto ecosystem, such as digital wallet providers and miners. Additionally, the bill tackles the issue of ‘unhosted’ digital wallets by requiring banks and money service businesses to identify, document, and report certain digital transactions linked to these wallets or those in non-compliant regions. Furthermore, the proposal seeks to expand the Bank Secrecy Act’s domain concerning foreign bank accounts to include digital assets, necessitating US individuals involved in international transactions exceeding $10,000 in digital assets to notify the Internal Revenue Service.
While the proponents of the bill underline its significance in safeguarding the nation’s financial structure, its potential impact on individual freedoms within the crypto sector remains a point of contention for critics.