After a period of delay, two U.S. senators, Elizabeth Warren and Roger Marshall, have reintroduced the “Digital Asset Anti-Money Laundering Act of 2023.” This version of the bill places increased focus on industry participants like miners and validators. Senators Joe Manchin and Lindsey Graham have joined as cosponsors for this revived legislation.
The bill aims to enforce stricter regulations on the cryptocurrency industry, with a particular emphasis on preventing money laundering. If passed, the legislation would mandate that all participants in the crypto space report transactions exceeding $10,000. This move comes as part of ongoing efforts to ensure transparency and accountability in the digital asset ecosystem.
The initial introduction of the bill took place in December, proposing that U.S. cryptocurrency businesses adhere to the same know-your-customer (KYC) rules as traditional banks. However, the Chamber of Digital Commerce has voiced opposition to the bill, asserting that it might hinder digital asset innovation within the United States.
The Chamber of Digital Commerce highlights the potential negative impact on digital asset validators and miners. These participants typically engage in technical aspects of blockchain networks and are not directly involved in providing financial services. Thus, they may not fall under the scope of financial institutions as defined by the Financial Crimes Enforcement Network (FinCEN).
The Chamber of Digital Commerce argues that imposing the regulations intended for traditional financial entities on digital asset validators and miners could lead to significant compliance costs. This burden might force digital asset companies to leave the U.S., resulting in a potential loss of skilled developers and technical experts from the industry.
As the U.S. debates the regulatory landscape for the cryptocurrency sector, other countries in Asia have already taken steps to regulate digital assets. Japan introduced anti-money laundering rules for cryptocurrency transactions, South Korea implemented the FATF’s travel rule, and India expanded the Prevention of Money Laundering Act to encompass digital assets.
The renewed effort by U.S. senators to pass the “Digital Asset Anti-Money Laundering Act of 2023” underscores the ongoing discussions around how to strike a balance between fostering innovation and ensuring the integrity of the cryptocurrency industry.
