- New law will crack down on crypto to prevent risk of money laundering, counter terrorist financing
- Russia, Iran, and North Korea have used digital assets to fund illegal weapons programs
- The new law would increase responsibilities under the Bank Secrecy Act
US Senators Elizabeth Warren (D-Mass.) and Roger Marshall (R-Kan.) announced that nine more senators would support the bipartisanDigital Asset Anti-Money Laundering Act they proposed,according to the US Senate’s website.
If passed into law, the act would crack down on crypto in an effort to prevent risk of money laundering to the financial system and counter terrorist financing.
Cracking down on illegal crypto use
Senator Warren commented:
Crypto is enabling rogue nations, drug lords, ransomware gangs, and fraudsters to launder billions in stolen funds, evade sanctions, fund illegal weapons programs, and profit from devastating cyberattacks. Our expanding coalition shows that Congress is ready to take action – our bipartisan bill is the toughest proposal on the table cracking down on crypto’s illicit use and giving regulators more tools in their toolbox.
Support from leading institutions
This bill has been endorsed by Transparency International US, Global Financial Integrity, Bank Policy Institute,Massachusetts Bankers Association, National District Attorneys Association, Major County Sheriffs of America,the National Consumer Law Center, National Consumers League, Massachusetts Sheriffs’ Association, and AARP.
The risks of digital asset use
The US Department of Justice, Treasury Department, and other financial crime and national security experts have issued warnings about criminals using digital assets to traffic drugs, launder money, perpetrate ransomware attacks and fraud schemes, and finance terrorism.
Rogue nations like Russia, Iran, and North Korea have used digital assets to fund illegal weapons programs, launder stolen funds, and evade international and US sanctions. For instance, almost half of North Korea’s missile program is believed to be financed by digital assets and cybercrime. Illegal digital asset transactions peaked at $20 billion in 2022.
Expected effects of the new law
The new law would increase responsibilities under the Bank Secrecy Act (BSA), including Know-Your-Customer requirements, to crypto miners, wallet providers, validators, and other network participants.
It would also direct FinCEN to finalize and enforce a rule it proposed back in 2020, which would require money service businesses and banks to keep records, verify customer identities, and file reports on specific transactions involving non-hosted wallets or wallets hosted in jurisdictions that don’t comply with the BSA.
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