It brings us no joy to tell you that two U.S. senators, Elizabeth Warren and Roger Marshall, have reintroduced the “Digital Asset Anti-Money Laundering Act of 2023” Senators Joe Manchin and Lindsey Graham have also shown their support, joining as cosponsors of the bill. This legislative effort underscores the ongoing debate about balancing innovation and financial regulation.
Initially presented in December, the bill aims to mandate U.S. cryptocurrency enterprises to adhere to the same know-your-customer (KYC) standards traditionally imposed on banks. The latest is a move intended to counteract potential illicit activities like money laundering, even though studies show that less than 1% of crypto transactions are used for illegal activities.
However, this iteration of the bill has drawn particular attention because of its stipulation that all entities in the cryptocurrency space, including miners and validators, will be mandated to report any transactions exceeding US$10,000. This inclusion broadens the scope significantly from the initial draft.
Industry players, represented by bodies such as the Chamber of Digital Commerce, have voiced considerable concerns. The Chamber highlights that the bill might inadvertently stymie digital innovation in the country. They argue that equating validators and miners with traditional financial institutions is a misstep. “Digital asset validators and miners are primarily tied to the technical facets of blockchain networks and aren’t in the business of offering financial services to clients,” the Chamber mentioned in its statement.
As the U.S. grapples with regulation, the global race to innovate intensifies.
