Nine members of the United States Congress have expressed their endorsement for the recently revived Digital Asset Anti-Money Laundering Act, initially presented by Senators Elizabeth Warren (D-MA), Roger Marshall (R-KS), Joe Manchin (D-WV), and Lindsey Graham (R-SC). Industry specialists caution that this legislative measure represents a significant encroachment on the individual liberties and privacy of cryptocurrency participants.
Momentum Builds for Digital Asset Anti-Money Laundering Act
Senators Elizabeth Warren, Roger Marshall, Joe Manchin, and Lindsey Graham have garnered the backing of an additional nine U.S. legislators for the Digital Asset Anti-Money Laundering Act. The act is formulated to “ameliorate existing legislative gaps and compel cryptocurrency firms to adhere more closely to existing anti-money laundering and counter-terrorism financing (AML/CTF) standards that currently regulate the broader financial ecosystem,” according to the congressional sponsors.
The legislation was first introduced by Senator Warren in December of the preceding year. It was re-launched in July by Senators Warren, Marshall, Manchin, and Graham. Analysts have categorized the legislation as a pronounced infringement on the privacy and personal freedoms of those who use cryptocurrencies. Last week, Senators Catherine Cortez Masto (D-NV), Gary Peters (D-MI), Dick Durbin (D-IL), Tina Smith (D-MN), Angus King (I-ME), Jeanne Shaheen (D-NH), Bob Casey (D-PA), Richard Blumenthal (D-CT), and Michael Bennet (D-CO) announced their support for the act.
Senator Cortez Masto emphasized, “It is imperative to curtail global drug syndicates and other illicit organizations from financing their activities through digital currencies. Our cross-party legislation ensures that cryptocurrency enterprises are subject to the same regulatory framework as traditional financial institutions, shuts down avenues that facilitate criminal behavior, and equips our financial system with the requisite instruments to target malevolent actors.”
Endorsement for the bill has also come from organizations such as the Bank Policy Institute, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, AARP, National Consumer Law Center (representing its underprivileged clients), and National Consumers League.
The Bank Policy Institute articulated, “Current regulations around anti-money laundering and the Bank Secrecy Act must be modernized to encompass digital assets. We are committed to collaborating on this endeavor to fortify our national financial system against all manifestations of unlawful finance.”
According to the details disseminated by the bill’s supporters, the Digital Asset Anti-Money Laundering Act will:
Extend the responsibilities under the Bank Secrecy Act (BSA), including Know-Your-Customer (KYC) mandates, to operators in the digital asset space such as wallet providers, miners, and validators among others who partake in securing, verifying, or facilitating digital asset transactions.
Address the notable regulatory vacuum concerning “unhosted” digital wallets by obliging banks and money service businesses to “authenticate customer and third-party identities, maintain records, and submit filings concerning specific digital asset transactions that involve unhosted wallets or wallets situated in jurisdictions not in compliance with BSA norms,” the legislative proponents stated.
Additionally, the legislation proposes the extension of BSA regulations pertaining to foreign banking accounts to encapsulate digital assets. It stipulates that U.S. individuals “involved in a transaction exceeding $10,000 in digital assets via one or multiple foreign accounts should file a Report of Foreign Bank and Financial Accounts (FBAR) with the Internal Revenue Service.”
Frequently Asked Questions (FAQs) about Digital Asset Anti-Money Laundering Act
What is the Digital Asset Anti-Money Laundering Act?
The Digital Asset Anti-Money Laundering Act is a piece of legislation initially introduced by Senators Elizabeth Warren, Roger Marshall, Joe Manchin, and Lindsey Graham. It aims to bring cryptocurrency companies into greater compliance with existing anti-money laundering and counter-terrorism financing (AML/CTF) frameworks.
Who are the key lawmakers supporting this act?
The act has gained the support of an additional nine U.S. legislators, including Senators Catherine Cortez Masto, Gary Peters, Dick Durbin, Tina Smith, Angus King, Jeanne Shaheen, Bob Casey, Richard Blumenthal, and Michael Bennet, along with its initial sponsors.
What organizations endorse this bill?
Organizations such as the Bank Policy Institute, Transparency International U.S., Global Financial Integrity, National District Attorneys Association, Major County Sheriffs of America, AARP, National Consumer Law Center, and National Consumers League have endorsed the bill.
What are the main components of the legislation?
The legislation aims to extend the Bank Secrecy Act responsibilities, including Know-Your-Customer requirements, to digital asset wallet providers, miners, validators, and other network participants. It also seeks to regulate transactions involving ‘unhosted’ digital wallets and extend Bank Secrecy Act rules to digital assets in foreign accounts.
What criticisms has the act received?
Industry experts have warned that the bill may represent a significant infringement on the privacy and personal freedoms of cryptocurrency users.
How will the act impact transactions exceeding $10,000?
The legislation stipulates that U.S. individuals engaged in a transaction with a value greater than $10,000 in digital assets through foreign accounts should file a Report of Foreign Bank and Financial Accounts (FBAR) with the Internal Revenue Service.
How does the act aim to prevent criminal activity?
Is this legislation bipartisan?
When was the bill first introduced, and when was it reintroduced?
The bill was first unveiled by Senator Elizabeth Warren in December of the previous year and was reintroduced in July by Senators Warren, Marshall, Manchin, and Graham.
More about Digital Asset Anti-Money Laundering Act
- Digital Asset Anti-Money Laundering Act Official Document
- Senator Elizabeth Warren’s Legislative Profile
- Bank Secrecy Act Overview
- Anti-Money Laundering and Counter-Terrorism Financing Frameworks
- Global Financial Integrity
- National District Attorneys Association
- Transparency International U.S.
- Report of Foreign Bank and Financial Accounts (FBAR)
- Cryptocurrency Regulations and Legislation
- Analysis of the Impact on Individual Privacy