In US cryptocurrency, the Digital Asset Anti-Money Laundering Act of 2022 is a bipartisan piece of legislation introduced by Sen. Elizabeth Warren on Wednesday to combat bitcoin money laundering.
Sen. Roger Marshall of Kansas is a co-sponsor of the legislation, which is intended to reduce the dangers that cryptocurrencies and other digital assets pose to the national security of the United States by plugging gaps in the existing anti-money laundering system.
US Cryptocurrency
The objective is to establish compliance requirements for digital currencies that are more akin to the regulations that apply to the rest of the financial system.
The bipartisan initiative aims to remedy the lack of US cryptocurrency regulation that has existed for years. For instance, the law would extend to digital assets certain obligations under the Bank Secrecy Act, such as the Know-Your-Customer requirement, which requires banks to confirm the legitimacy of their clients.
The collapse of FTX, previously the second-largest cryptocurrency exchange in the world, followed the most well-known cryptocurrency controversy to date, which led to Warren’s unveiling of the bill. Sam Bankman-Fried, a former CEO, was detained last week and is accused of fraud and money laundering. Bankman-Fried has denied any impropriety or malicious intent on his part.
In a statement, Warren said that regulations for the cryptocurrency sector should be similar to those that apply to traditional financial institutions. According to a statement from Warren, rogue states, oligarchs, drug lords, and human traffickers are utilizing digital assets to launder billions in stolen money, escape sanctions, and finance terrorism.
This legislation will ensure that the same standards apply across similar financial transactions and that the cryptocurrency industry adheres to common sense rules like banks, brokers, and Western Union.
According to a statement from Warren’s office, cybercriminals made a record high of at least $14 billion in digital assets last year. The senator from Massachusetts took part in the Senate Banking Committee hearing on the collapse of FTX on Wednesday.
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Digital Asset Anti-Money Laundering Act Includes:
- Extend the Know-Your-Customer obligations under the Bank Secrecy Act (BSA).
- Close a significant hole in “unhosted” digital wallets.
- Don’t let financial institutions use or conduct business using digital asset mixers and other anonymity tools.
- Strengthen enforcement of BSA compliance
- Expand BSA regulations to cover digital assets when reporting foreign bank accounts
- Reduce the hazards of illicit funding posed by digital asset ATMs.
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