More US Senators Back Digital Asset Anti-Money Laundering Act

September 19, 2023

More Democratic Senators have backed Senator Elizabeth Warren on the Digital Asset Anti-Money Laundering Act.  Warren has now the support of prominent names including the Chair of the Senate Homeland Security and Governmental Affairs Committee, Senators Gary Peters, and the Chair of the Senate Judiciary Committee Dick Durbin.

Other names who have joined the bipartisan coalition to support the bill include, Catherine Cortez Masto( Nevada), Michael Bennet (Colorado), Richard Blumenthal (Connecticut), Bob Casey (Pennsylvania), and Jeanne Shaheen (New Hampshire).

Senator Warren said in a Press Release, “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.”

What Are the Specific Features of US Digital Asset Anti-Money Laundering Act

The Digital Asset and Money Laundering Act aims to ensure that digital assets comply with the broader AML/CFT regulatory framework so that the risks they pose to national security can be mitigated.

The Act would address the following key features:

  • Extension of Bank Secrecy Act: This calls for making virtual asset service providers, crypto miners, digital asset wallet providers, and validators, comply with know Your Customer requirements as is the case for other financial institutions.
  • Addressing of Gap with Respect to Unhosted Wallets: This requires binding banks and money services businesses to do counterparty due diligence by verifying their addresses, keeping records, and filing reports related to unhosted wallets or even wallets located in non-BSA-compliant jurisdictions.
  • Directions by FinCen: FinCen should be issuing directions on managing risks related to digital assets that are inherently for the purpose of hiding identities by using anonymity-enhancing technologies.
  • Strengthening Enforcement of BSA: The achievement of this goal is proposed by directing the treasury to build AML/CFT review and reporting mechanism catered for Money Service Businesses and other digital assets service providers, in line with BSA.
  • Setting Reporting Threshold for Foreign Bank Accounts Holding Cryptos:This calls for filing a Report of Foreign Bank and Financial Accounts (FBAR) with internal revenue systems for US citizens engaged in offshore accounts exceeding the value of $10,000 in digital assets.
  • Mitigating Financial Risks of Digital Asset ATMs:Requiring digital asset owners and administrators to verify the identity of their customers and submit the physical addresses of their Kiosks.

Digital Asset Anti-Money Laundering Act has support from many organizations in the financial and legal sectors including the Massachusetts Sheriff’s Association, Massachusetts Banker Association, National Consumer Law Centre, National District Attorney Associations, Transparency International U.S., Major County Sheriffs of America, National Consumers League, and Bank Policy Institute.

Also Read: UAE Sets Up Judicial Body to Combat Money Laundering and Economic Crime