The US Government Removes AML Provisions from NDAA
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 legislation that authorizes how the country’s defense department can use federal funding.
Thorough Review System and Reporting
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.
Combating Anonymous Crypto Asset Transactions
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. Furthermore, the report would cover the regulatory approaches adopted by other jurisdictions.
Guidance on Crypto Regulations
Following that, guidance would be given on the implementation of crypto regulations to the U.S. government. The crypto-related amendments included elements from the Digital Asset Anti-Money Laundering Act and the Responsible Financial Innovation Act.
A Team Effort
This was proposed by a team of senators, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall.
Hot Take: US Government Removes AML Provisions from NDAA
The United States government has decided to remove two provisions from the National Defense Authorization Act (NDAA) that aimed to address anti-money laundering concerns in the cryptocurrency industry. These provisions included establishing a review system for financial institutions and combating anonymous crypto asset transactions. The removal of these provisions raises questions about the government’s approach to regulating cryptocurrency and addressing illicit activities. It also highlights the ongoing debate surrounding the need for effective AML measures in the crypto space. As the industry continues to evolve, it remains to be seen how governments will navigate these challenges and ensure the integrity of the financial system.
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