- Senators Elizabeth Warren and Roger Marshall presented the bill against money laundering of digital assets, which seeks to apply Know Your Customer (KYC) rules to blockchain infrastructure providers and crypto users operating in the United States.
- Under this bill, all crypto companies should comply with the same regulations as banks and corporations.
- This bill would also affect non-hosted or self-custody cryptocurrency wallets since, in order to operate, they must comply with the rules of Bank Secrecy.
In a context framed by the collapse of FTX and the migration of crypto investors to self-custody wallets, Senators Elizabeth Warren and Roger Marshall presented the bill against money laundering of digital assets.
The fact is, if it becomes law, Know Your Customer (KYC) rules will apply to blockchain infrastructure providers and crypto users operating in the United States. This includes both developers and miners or validators that support the blockchain.
Under this bill, all crypto companies should comply with the same regulations as banks and corporations. The goal is to end money laundering through digital assets, but at what cost?
US Senator Seeks Tighter Regulations for the Crypto Ecosystem
If the bill is approved, the Financial Crimes Enforcement Network (FinCen) will have the authorization to reclassify cryptocurrency entities as “money service companies”; this implies that the entire crypto ecosystem would be subject to the global financial regulations of the conventional money market and, therefore, to the rules established in the Bank Secrecy Law.
This bill would also affect non-hosted or self-custody cryptocurrency wallets since, in order to operate, they must comply with the rules of Bank Secrecy.
Of course, the bill prohibits any financial institution or user from using a digital asset mixer or other technologies to increase the privacy of transactions.
Warren assured during a statement He told CNN that “common sense crypto legislation” would protect the national security of the United States.
The crypto community responds
Regulation is necessary, but it must be meticulously established. As expected, the crypto community has received the news as an offensive against the ideals of the crypto industry.
Coin Center, a cryptocurrency advocacy group, defined the bill as “un opportunistic and unconstitutional assault on cryptocurrency self-custody, developers and node operators“.
For his part, Coin Center research director Peter Van Valkenburgh pointed out that although this bill seeks to provide a solution to money laundering and combat terrorist financing, it is similar to the authoritarian surveillance systems implemented in South Korea. North by Kim Jong-un, and in Russia by Vladimir Putin.
It is so the bill is in fact a repudiation of the liberal values that are sought to be achieved through the use of cryptocurrencies.
In fact, the note written by Van Valkenburgh emphasizes that nothing about the bill has the ability to prevent the next FTX from happening, ensuring that in fact puts users at greater risk.
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