US Senate supports national defense bill that targets crypto mixers
July 28, 2023 3:40 PM
A legislative amendment strengthens regulation on institutions that engage in cryptocurrency trading.
On July 27, the United States Senate adopted the $886 billion 2024 National Defense Authorization Act (NDAA). A portion of the bill aims to punish crypto exchanges, privacy coins, and institutions that deal in crypto mixing.
The National Defense Authorization Act (NDAA) is a bill that helps to authorize→ how the country's defense department can use federal funds. A number of lawmakers, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall, proposed a crypto-related amendment to the bill.
The amendment was drafted using provisions from the Digital Asset Anti-Money Laundering Act, which was passed in 2022, and the Responsible Financial Innovation Act, which intends to put in place safeguards to avoid another FTX-style event from occurring in the industry.
The amendment will specifically mandate the establishment of crypto examination criteria. This would aid in risk assessment and compliance with associated sanctions and financial crimes laws.
Aside from that, it requires the US Treasury Department to conduct a study to crack down on anonymous crypto transactions. This includes the use of crypto mixers, such as Tornado Cash, to make transactions private.
In 2022, the Treasury imposed sanctions on the crypto mixer Tornado Cash, prohibiting residents from utilizing it. While the mixer was intended to help consumers anonymize their cryptocurrency transactions, it was frequently used by criminal actors to mask their illicit cryptocurrency from hackers and vulnerabilities. The mixer, according to the Treasury, failed to install measures that prohibit money laundering from undesirable actors in the market.
Meanwhile, the NDAA includes an amendment requiring US corporations to disclose→ their investments in China. According to U.S. Senator Bob Casey, this notification is required so that the government may determine how much "critical technology" is being given to "adversaries."