Sens. Elizabeth Warren, D-Mass., and Roger Marshall, R-Kan., introduced new legislation on Dec. 14 that would apply to the cryptocurrency industry existing laws that aim to combat money laundering and terrorism financing.
The Digital Asset Anti-Money Laundering Act of 2022 aims to mitigate risks that cryptocurrency and other digital assets pose to national security by closing loopholes in existing money laundering and terrorism financing statutes to bring the digital asset ecosystem into greater compliance with rules governing the rest of the financial system.
“Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism,” Sen. Warren said in a press release. “The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions.”
The bill also directs the Financial Crimes Enforcement Network (FinCEN) to oversee the application of an anti-money laundering framework within the digital asset marketplace, but to specifically implement the agency’s previous rule that applies financial regulations to digital asset trading firms.
In addition, the measure would require U.S. citizens to file a report with FinCEN declaring the purpose of a transfer involving cryptocurrency or digital assets transactions greater than $10,000 to an account outside of the U.S. If the bill is passed, FinCEN would be required to implement this rule within 120 days.
“Following the September 11, 2001, terrorist attacks, our government enacted meaningful reforms that helped the banks cut off bad actors’ from America’s financial system. Applying these similar policies to cryptocurrency exchanges will prevent digital assets from being abused to finance illegal activities without limiting law-abiding American citizens’ access,” said Sen. Marshall.
“Our common-sense bill will make it harder for criminals to finance their criminal activities, like the trafficking of illicit fentanyl through the dark web, that can harm innocent Kansans,” he added.
The legislation builds on the Federal government’s push to impose regulations on digital assets, which national security and financial crime experts have warned are increasingly being used for money laundering, theft and fraud schemes, terrorist financing, and other crimes.
The Biden-Harris administration has also prioritized regulating digital assets to prevent them from being used as tools in criminal activity.
In September the White House released the first-ever digital assets framework that encompasses a plethora of findings on digital assets and how Federal agencies should move forward with regulations and guidelines. The framework also followed an executive order by President Biden in March entitled “Ensuring Responsible Development of Digital Assets,” to better understand some of the effects of digital assets.