After FTX's collapse, US Senators look to strengthen regulations for crypto ATMs, expand classification for MSB and prohibit the use of crypto mixers.
On December 14th, US Senators Elizabeth Warren and Roger Marshall introduced the Digital Asset Anti-Money Laundering Act of 2022.
The bill was introduced during the hearing at the Senate Banking Committee dubbed “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers.” When presenting a seven-page bill, Warren stated:
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Senator Marshall and I introduced a bipartisan bill today that requires crypto to follow the same money-laundering rules as every bank, every broker and Western Union all have to follow today.
During the introduction, Warren and Marshall stated that the bill aims to regulate digital asset kiosks, also known as crypto ATMs. On top of that, the Act prohibits financial institutions from using crypto mixers and expands the classification of a money service business (MSB).
The new Digital Asset Anti-Money Laundering Act of 2022 describes MSBs as “custodial and unhosted wallet providers, cryptocurrency miners, validators, or other nodes who may act to validate or secure third-party transactions, independent network participants, including MEV <maximum extractable value> searchers, and other validators with control over network protocols.”
It is worth noting that previously, the term did not include validators, unhosted wallets and miners.
The bill adds additional responsibilities for crypto regulators in the United States. US Senators want the Securities and Exchange Commission, the Treasury Department and Commodity Futures Trading Commission to issue a review process for their jurisdictions.
On top of that, the Treasury is asked to create regulation banning companies from using “digital asset mixers, privacy coins, and other anonymity-enhancing technologies.”
Nevertheless, crypto-related businesses would have to implement Anti-Money Laundering policies and report transactions of over $10,000. Moreover, the owners of crypto ATMs, the Drug Enforcement Administration and the Financial Crimes Enforcement Network (FinCEN) would have to comply with particular reporting requirements.