US Senate Bill Targets Crypto Industry with Anti-Money Laundering Requirements for DeFi Protocols
A new bill introduced in the US Senate aims to regulate the crypto industry by imposing strict anti-money laundering (AML) requirements on decentralized finance (DeFi) protocols. The proposed bill, called the Crypto-Asset National Security Enhancement Act of 2023, seeks to combat crypto-facilitated crime and protect national security. Here are the key points of the bill:
1. DeFi Protocol Controls: DeFi protocols would be required to implement bank-like controls on their user base, which includes vetting and collecting customer information, maintaining AML programs, reporting suspicious activity, and blocking sanctioned individuals from using their protocol.
2. Broad Scope of Regulation: The bill aims to regulate not only the DeFi protocols themselves but also anyone who “controls” a DeFi protocol or develops applications for their use.
3. Investor Responsibility: If no entity controls a DeFi protocol, anyone who invests over $25 million in developing the protocol will assume the regulatory obligations.
4. Expanded Treasury Department Authority: The bill grants the Treasury Department more power to police alleged money laundering in non-traditional financial settings, including the crypto industry.
5. Crypto Kiosk Regulations: The bill also imposes identity verification requirements on crypto kiosks.
In conclusion, the proposed bill seeks to establish stricter controls and regulations for the DeFi sector and expand oversight on money laundering in the crypto industry. It reflects growing concerns about the potential risks associated with decentralized finance.
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