United States Government Removes Anti-Money Laundering Provisions from National Defense Authorization Act
In a move that has raised concerns within the cryptocurrency community, the United States government has eliminated two provisions from the National Defense Authorization Act (NDAA) that were designed to address anti-money laundering (AML) concerns involving cryptocurrency.
The NDAA is a crucial legislation that authorizes how the country’s defense department can use federal funding. Among the extensive list of provisions removed from the NDAA, two specifically outlined a thorough review system and reporting of crypto activities to combat illicit practices.
The first provision mandated the US Secretary of the Treasury to coordinate with banking and government regulators in setting up a risk-focused examination and review system on crypto for financial institutions. The second provision addressed combating anonymous crypto asset transactions, particularly involving crypto mixers and tumblers.
This involved producing a report detailing the volumes of crypto asset transactions linked to sanctioned entities and covering the regulatory approaches adopted by other jurisdictions. Furthermore, guidance would be given on the implementation of crypto regulations to the U.S. government.
On July 28, the United States Senate passed the NDAA worth $886 billion, including crypto-related amendments from the Digital Asset Anti-Money Laundering Act and the Responsible Financial Innovation Act. This move, proposed by a team of senators, sought to set up precautions to avoid another FTX-style incident in the industry.
In recent times, the US government has been deliberating on issues related to money laundering and terrorist funding facilitated through the use of crypto. The Financial Services Committee of the US House of Representatives held a meeting on November 15 to discuss illegal activities within the crypto ecosystem, as well as the efforts of proactive crypto exchanges and decentralized finance providers to prevent money laundering and terrorist financing.
This decision to eliminate AML provisions from the NDAA has sparked fears and doubts within the industry, as lawmakers continue to push for more stringent regulations in the United States. The move has raised concerns about the potential for increased illicit activities involving cryptocurrency, and it remains to be seen how the government will address these concerns in the future.
The crypto community will be closely monitoring the government’s next steps in addressing AML concerns and ensuring the security of the industry.