New Legislation for Cryptocurrencies is a collapse
2022.12.14 14:06
New Legislation for Cryptocurrencies is a collapse
Budrigannews.com – On December 14, U.S. Senators Elizabeth Warren and Roger Marshall introduced the “Digital Asset Anti-Money Laundering Act of 2022” as the crypto community focused on the FTX drama. The seven-page bill would regulate digital asset kiosks, also known as automated teller machines (ATMs), prohibit financial institutions from using technology like digital asset mixers, and expand the definition of money service business (MSB).
announcing the bill’s introduction at the “Crypto Crash:” hearing of the Senate Banking Committee Warren, a prominent crypto critic, stated, “Why the FTX Bubble Burst and the Harm to Consumers.”
“Senator 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.”
The Financial Crimes Enforcement Network (FinCEN) defined “custodial 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” as the definition of “money service businesses” in the legislation.
Miners, validators, and unhosted wallets were not previously considered MSBs.
Businesses that provide financial services would be required to implement written Anti-Money Laundering (AML) policies. The bill would implement new requirements, such as reporting transactions exceeding $10,000 in accordance with the Bank Secrecy Act, in addition to finalizing reporting requirements that FinCEN had previously proposed.
A rule prohibiting financial institutions from interacting with “digital asset mixers, privacy coins, and other anonymity-enhancing technologies” is also mandated by the bill.
The Treasury Department, Securities and Exchange Commission, and Commodity Futures Trading Commission would be required to establish procedures for reviewing the organizations that each regulates.
The bill would also establish reporting requirements for FinCEN and the Drug Enforcement Administration, as well as for kiosk owners of digital assets.
Warren and Marshall, like legislators Cynthia Lummis and Kirsten Gillibrand, who wrote the Responsible Financial Innovation Act, are on opposite sides of the political spectrum in the United States. Marshall is a conservative Republican from Kansas, while Warren is a liberal Democrat from Massachusetts.
Patrick Daugherty, head of Foley & Lardner’s digital asset practice and adjunct professor of digital assets at Cornell Law School, issued a statement to Cointelegraph, which read, “I am delighted to see Senator Warren acting in a bipartisan manner by joining with Senator Marshall in the introduction of this bill.” Daugherty was referring to the introduction of the bill.
Daugherty expressed concern about “the loss of financial privacy for millions of digital asset buyers and sellers who are not criminals,” despite acknowledging the bill’s “salutary effect of impeding more thoroughly the abuse of digital assets for crime.”
Cointelegraph was informed by Seward & Kissel attorney Casey Jenkins, a former employee of the Consumer Financial Protection Bureau, that the bill might have “sweeping ramifications” for MSBs. A ban on mixers and privacy coins would result from the bill’s definition of “a website, software, or other service designed to conceal or obfuscate the origin, destination, and counterparties of digital asset transactions” prohibiting institutions from interacting with digital mixers.
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Also potentially problematic is the requirement that miners and validators conduct due diligence. Miners and validators lack the skills necessary to carry out the new responsibilities that this legislation would impose on them. Daugherty stated, “They are not banks or brokers, which are already staffed for this function.”
This bill by @SenWarren and @RogerMarshallMD is the most significant attack on digital freedom i’ve ever seen.
It turns validators into money services businesses
It bans financial privacy
It turns America into a full on surveillance state
This is how western democracies die pic.twitter.com/XM1JjM0uL0
— RYAN SΞAN ADAMS – rsa.eth (@RyanSAdams) December 14, 2022
According to Jenkins, the bill was “thrown together at the last minute” with the intention of “setting the tone” for subsequent congressional debate. It will not be taken into consideration during this session.
Additionally, Warren has stated that he will draft comprehensive crypto regulation legislation that reportedly favors the SEC as the regulator.
