The Latest U.S. Defense Bill Drops Crypto Regulatory Law Proposals
The most recent U.S. defense bill has excluded two proposals for crypto regulatory laws that aimed to address money laundering and oversight of financial institutions.
The National Defense Authorization Act, a bill that must be passed by the U.S. government, was a collaborative effort between the House of Representatives and the Senate. However, the final version of the bill did not include provisions related to privacy coins and anti-money laundering measures for virtual currency service providers.
This decision has been criticized by the Chamber of Digital Commerce, a trade association focused on advancing the blockchain and crypto industry, as a missed opportunity.
Missed Opportunity for Crypto Regulation
The Senate had initially included two crypto provisions in its version of the bill. One provision called for the establishment of a thorough examination and review system for financial institutions to ensure compliance with reporting obligations for crypto assets under money-laundering rules. However, these amendments were ultimately dropped in the final draft.
Curtains Close on Crypto Regulation in the U.S.
With the exclusion of these proposed rules from the defense bill, it seems unlikely that cryptocurrencies will have any regulatory framework in the U.S. market anytime soon.
Lawmakers have been urging President Joe Biden to enact legislation that addresses the use of virtual currencies in terrorism. A bipartisan group of senators recently proposed a law imposing sanctions on financial institutions involved in financing terrorist groups using crypto.
Proposed Legislation Against Financing Terrorism
The proposed legislation aims to prohibit transactions between financial institutions and banned entities using digital assets. It also seeks to impose stringent penalties on firms found to be involved in financing terrorism.
The motivation behind this legislation stems from reports claiming that Hamas, classified as a terrorist organization by the U.S. government, received over $90 million in crypto support. However, these claims have been refuted by blockchain analytics firm Elliptic.
Hot Take: Uncertain Future for Crypto Regulation in the U.S.
The exclusion of crypto regulatory provisions from the latest defense bill highlights the challenges faced by lawmakers in establishing a comprehensive framework for cryptocurrencies in the United States. With ongoing concerns about money laundering and terrorism financing, it remains to be seen how and when the U.S. government will address these issues within the crypto industry.
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