The U.S. Senate has given the green light to the $886 billion 2024 National Defense Authorization Act (NDAA), a critical piece of legislation that determines the use of federal resources by the nation’s defense department.
Notably, this bill includes a significant clause aimed at regulating the cryptocurrency industry, focusing on institutions engaged in cryptocurrency trading, cryptocurrency mixers, and anonymous coins that enable heightened transaction anonymity.
Senators Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall were instrumental in introducing an amendment to the bill addressing how cryptocurrencies should be treated.
The senators included key provisions from two existing laws: the Responsible Financial Innovation Act, aimed at preventing incidents similar to the FTX event in the cryptocurrency industry, and the Digital Asset Anti-Money Laundering Act, initially proposed in 2022.
The approved amendment establishes criteria for examining cryptocurrencies, conducting risk assessments, and ensuring cryptocurrency trading companies comply with money laundering regulations and penalties.
Additionally, the amendment mandates the Treasury Department to conduct a comprehensive study targeting anonymous cryptocurrency transactions, specifically focusing on cryptocurrency mixers like Tornado Cash. These mixers obscure the origins and destinations of transactions, raising concerns about potential illicit activities.
The study will examine the implications of anonymous cryptocurrency transactions and develop strategies to mitigate associated risks. The objective is to foster a more transparent and accountable cryptocurrency environment while combatting illicit activities that exploit anonymity.
In 2022, the U.S. Treasury Department had already taken action against the cryptocurrency mixer Tornado Cash, imposing sanctions that banned U.S. citizens from using the platform. Although designed to anonymize cryptocurrency transactions, malicious agents exploited the mixer to protect illegally acquired cryptocurrency from potential hackers.
The decision to impose sanctions on Tornado Cash was driven by concerns over its insufficient safeguards against money laundering by criminals, prompting significant scrutiny from authorities.
By incorporating the cryptocurrency regulation amendment into the 2024 NDAA, the U.S. government takes a proactive stance in tackling the challenges posed by digital currencies. The amendment aims to promote transparency and security in the rapidly evolving financial landscape.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
