In the US, is digital freedom threatened by money laundering legislation?

Sat 17 December 2022 ▪ 14:00 ▪
4
my read – by
Mikaia ANDRIAMAHAZOARIMANANA

If passed, the Digital Assets Anti-Money Laundering Act proposed by Senators Elizabeth Warren and Roger Marshall will cause a stir in the cryptosphere. Doubt hangs over its impact on digital freedom in Uncle Sam’s land.

Senators Warren and Marshall take on money laundering

With the crypto-sphere in turmoil following the collapse of FTX, two US senators introduced a bill dubbed the “Digital Asset Anti-Money Laundering Act” (DAAMLA). The qualification “bipartisan” stems from the contrasting political affiliations of these senators. If Elizabeth Warren is a liberal Democrat from Massachusetts, Roger Marshall is rather a conservative Republican from Kansas.

Their 7-page bill” would require anyone involved in maintaining the public blockchain infrastructure, whether through software development or validating transactions on the network, to register as a financial institution (FI) “says No Bullshit Bitcoin.

However, this status as a financial institution imposes in particular:

  • Know-Your-Customer (KYC) for crypto players, including wallet providers and miners;
  • establishment of an appropriate anti-money laundering program by FIs;
  • issuing reports on holders of cold crypto wallets at the request of the government;
  • the prohibition of any use of cryptoactive mixers such as Tornado Cash or anonymous cryptocurrencies such as Monero or Zcash;
  • etc

It should also be noted that the DAAMLA Act gives FinCEN more powers. The latter will act as a financial policeman, supposed to monitor transactions involving wallets not controlled by crypto exchanges, or non-depot wallets.

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The divided crypto community

Patrick Daughterty of Foley & Lardner is among the first to congratulate this initiative by the Warren-Marshall duo.

I am pleased to see Senator Warren acting in a bipartisan manner by joining Senator Marshall in introducing this bill. It has the beneficial effect of radically preventing the misuse of digital assets for criminal purposes “, he whispered to Cointelegraph.

This honey is not sweet for trader Rayan Adams

This bill from @SenWarren and @RogerMarshallMD is the most horrific attack on digital freedom I’ve ever seen. It turns validators into financial services companies. It prohibits financial confidentiality. [Et] it makes America a total surveillance state. This is how Western democracies die. »

This hastily drafted bill is unlikely to make it to the next session of Congress. However, note that Senator Warren is preparing comprehensive legislation to regulate cryptocurrencies. Gary Gensler’s SEC will gain more powers if this law passes.

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Mikaia ANDRIAMAHAZOARIMANANA avatar
Mikaia ANDRIAMAHAZOARIMANANA

The blockchain and crypto revolution is underway! And on the day when the effects will be felt on the most vulnerable economy in this world, against all hope, I will say that I had something to do with it

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