US Government Eliminates Two Crypto AML Provisions from National Defense Bill
Regulators have removed two Anti-money laundering provisions out of the National Defense Authorization Act. These provisions were related to regulatory sanctions on crypto trading. The NDAA is a regulatory framework that regulates the use of federal funding for defense department.
The AML provisions for AML regulations removed from NDAA shed light on review system and reporting for cryptocurrency trading to restrict illegal activities.
The first provision required Treasury Secretary to correspond with banking and government regulators for setting up risk-assessment and setup a review panel for crypto services providers and trading markets.
The second provision was to crack down on digital transactions generated from anonymous sources such as mixers and tumblers. The mentioned department had to generate and publish a detailed report regarding the process containing details such as sanctioned crypto trading volume.
Regulators Ease Crypto-related Sanctions
Regulators in the cryptocurrency sector have updated implementation of crypto regulations for United States government. A statement from the officials issued on this matter states that the amendments are added to para 1 and 3 regarding technology and services.
At the same time, Senate also passed the NDAA bill valued at $886 billion. The bill also made changes to the Digital Asset AML Act and Responsible Financial Innovation Act that was introduced in 2022.
Furthermore, the bill will also introduce precautions to prevent any new FTX-like instances repeating in the sector. The proposal changes for the crypto-sector were introduced by a team of senators such as Roger Marshall, Elizabeth Warren, Cynthia Lummis, and Kirsten Gillibrand.
In the context of current geo-political development government of United States has adopted a proactive approach regarding money-laundering and terrorist funding regulations in cryptocurrency sector.
US House of Representatives to Discuss Illicit Activities in DeFi Sector
The Financial Services Committee of the House of Representatives attended a meeting on 15th November to discuss illegal activities taking place within the digital asset industry.
At the same time, cryptocurrency investors presented a review of policies used by crypto trading platforms and decentralized services providers to prevent money-laundering and terror financing incidents.
The Role of Crypto Mixers in Money Laundering
On the other hand, regulatory bodies such as FinCEN are set to nominate crypto mixers as center of money laundering. FinCEN is also bringing legal requirements on digital asset ATM administrators to report and update the location of their units after every 3 months.
The ATM operators will also need to verify the identification of all their consumers based on a government-issued ID in addition to details such as name, address, and counterparty for each transaction. The Drug Enforcement Agency will use the details from FinCEN to monitor the drug purchases using digital currencies within an year of implementation of the proposed FinCEN laws.
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