Despite all the brains at their disposal, human beings have failed rather sensationally at not making mistakes. This dynamic, in particular, has already popped on the surface quite a few times throughout our history, with each appearance practically forcing us to look for a defensive cover. We will, however, solve our conundrum in the most fitting fashion, and we’ll do so by bringing regulatory bodies into the fold. Having a well-defined authority across each and every area was a game-changer, as it instantly concealed our many shortcomings. Now, the kind of utopia you would generally expect from such a development did arrive, but at the same time, it failed to stick around for long. Talk about what led us to the stated setback; the answer will literally touch upon technology before it covers anything else. You see, the moment technology got its layered nature to take over the scene, it allowed every individual an unprecedented chance to fulfil their ulterior motives at the expense of others’ well-being. In case this somehow didn’t sound bad enough, the whole runner soon began to materialize on such a massive scale that it expectantly overwhelmed our governing forces and sent them back to square one. After a lengthy spell in the middle of nowhere, though, it seems like the regulatory contingent is finally ready to make a comeback. The same has turned more and more evident in recent times, and truth be told, a newly-introduced bill should do a lot to solidify its traces moving forward.
Amid all the unrest by FTX’s collapse, Senators Elizabeth Warren and Roger Marshall have officially proposed a new bipartisan bill called the Digital Asset Anti-Money Laundering Act, which is designed to crack down on illegal uses of cryptocurrency. If approved, the new legislation will place know-your-customer (KYC) requirements on blockchain infrastructure providers and participants operating in the United States, including developers creating software for decentralized networks, and the miners and validators that support such networks. Another detail worth mentioning here is how the bill will also mandate FinCEN to implement a particular rule that was extended during the latter stages of 2020. To give you some recap, the stated rule was conceived specifically for the purpose of bolstering disclosures, as it required financial institutions to report transactions involving “unhosted” digital wallets. Basically, unhosted digital wallets are the ones where the user has complete control over the contents rather than an exchange or other third party.
Moving on, the bill in question even takes an aim at digital asset mixers by prohibiting institutions from using these services along with other privacy-enhancing technologies.
“Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions, and finance terrorism,” said Senator Warren. “The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions. The bipartisan bill will help close crypto money laundering loopholes and strengthen enforcement to better safeguard US national security.”
Unsurprisingly enough, the legislation wasn’t received well by the crypto industry, with many deeming the move as completely unconstitutional.
“The Digital Asset Anti-Money Laundering Act is a direct attack on technological progress and also a direct attack on our personal privacy and autonomy,” said Peter Van Valkenburgh, Director of Research at Coin Center.