The United States government has recently removed two key provisions from the National Defense Authorization Act (NDAA) aimed at addressing anti-money laundering (AML) concerns in the cryptocurrency sector. The NDAA, which authorizes federal funding for the country's defense department, initially included these provisions to establish a comprehensive review system and reporting mechanism for crypto activities to combat illicit practices.
One of the removed provisions required the US Secretary of the Treasury to collaborate with banking and government regulators to create a risk-focused examination and review system for crypto transactions in financial institutions. The second provision targeted anonymous crypto transactions, particularly those involving crypto mixers and tumblers, and involved producing a report on transactions linked to sanctioned entities and the regulatory approaches of other jurisdictions.
These amendments were part of broader legislative efforts, including elements from the Digital Asset Anti-Money Laundering Act of 2022 and the Responsible Financial Innovation Act. The latter seeks to implement safeguards to prevent incidents similar to the FTX collapse in the crypto industry, proposed by senators like Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall.
The U.S. government's ongoing deliberations on money laundering and terrorist funding via cryptocurrencies are evidenced by recent meetings of the Financial Services Committee of the US House of Representatives. These meetings focused on illegal activities within the crypto ecosystem and the proactive measures taken by crypto exchanges and decentralized finance providers to prevent money laundering and terrorist financing.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
