As the cryptoworld focused on the drama unfolding around FTX, United States Sen. Elizabeth Warren and Sen. Roger Marshall introduced the “Digital Asset Anti-Money Laundering Act of 2022” on Dec. 14. The seven-page bill would expand the classification of money service business (MSB), prohibit financial institutions from using technology such as digital asset mixers and regulate digital asset kiosks, otherwise known as automated teller machines (ATMs).
Announcing the introduction of the bill at the Senate Banking Committee hearing on “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers,” Warren, a vocal crypto critic, said:
“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.”
Under the legislation, money service businesses, a classification created by the Financial Crimes Enforcement Network (FinCEN), would be “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.”
Unhosted wallets, miners and validators were not previous considered MSBs.
Money service businesses would be required to have written Anti-Money Laundering (AML) policies and to implement them. The bill would finalize reporting requirements already proposed by FinCEN and impose new requirements, including reporting transactions over $10,000 in accordance with the Bank Secrecy Act.
The bill also instructs the Treasury Department to create a rule banning financial institutions from interacting with “digital asset mixers, privacy coins, and other anonymity-enhancing technologies.”
It would require the Treasury Department, Securities and Exchange Commission and Commodity Futures Trading Commission to set up review processes of the entities each regulates.
Finally, the bill would create reporting requirements for owner of digital asset kiosks and for FinCEN and the Drug Enforcement Administration.
Related: Institutional crypto adoption requires robust analytics for money laundering
Somewhat like the duo of legislators Cynthia Lummis and Kirsten Gillibrand, authors of the Responsible Financial Innovation Act , Warren and Marshall represent opposite ends of the U.S. political spectrum. Warren, a…
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