Introducing the Preventing Illicit Finance Through Partnership Act 2024
Two U.S. Senators, Bill Hagerty and Cynthia Lummis, have put forward a new bill called the Preventing Illicit Finance Through Partnership Act of 2024. The legislation aims to combat the illicit use of crypto assets by establishing an information-sharing pilot program. This program will facilitate better communication between federal law enforcement agencies and private companies.
Crypto is Not the Problem
Senator Lummis emphasized that while there are bad actors in the crypto industry, cryptocurrencies themselves are not the issue. The Preventing Illicit Finance Through Partnership Act is designed to work in collaboration with the private sector to identify and eliminate bad actors without stifling the entire emerging crypto industry. The goal is to gain insight into the world of crypto and develop federal rules to support its growth and innovation.
The Details of the Pilot Program
The pilot program, which is part of the Preventing Illicit Finance Through Partnership Act, will be chaired by the Attorney General. It will consist of 20 voluntary participants, including money services businesses and cryptocurrency companies. The program will run for a period of five years after the bill is enacted.
Efforts to Address Crypto’s Illicit Use
Various initiatives have been proposed to tackle the illicit use of cryptocurrencies, including Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act. However, critics argue that this bill effectively amounts to a crypto ban. In response, there have been counter efforts such as the “Stop the Crypto Ban” petition. Last year, Warren and other lawmakers sent a letter urging the Biden administration to address crypto’s role in illegal activities and terrorism.
The Decrease in Illicit Crypto Transactions
Data from blockchain analytics firm Chainalysis reveals that the volume of illicit activities in crypto transactions has declined. In 2023, the value received by illicit cryptocurrency addresses dropped significantly, and the share of crypto transaction volume associated with illicit activity decreased from 0.42% in 2022 to 0.34%. This indicates that illicit use of cryptocurrencies represents only a small portion of overall transaction volume.
Hot Take: Addressing Illicit Crypto Activities Through Partnership
With the introduction of the Preventing Illicit Finance Through Partnership Act 2024, U.S. lawmakers are taking steps to combat the misuse of cryptocurrencies. This bill emphasizes collaboration between federal regulators and the private sector to identify and remove bad actors without stifling the innovative potential of the crypto industry. It recognizes that cryptocurrencies themselves are not the problem, but rather the individuals who misuse them. By establishing a pilot program and enhancing communication, the aim is to gain a better understanding of crypto assets and develop federal regulations that support the growth and responsible use of cryptocurrencies in America.
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