An anti-money laundering invoice earlier than the US Senate and targeted partially on digital currencies “could upset years of policy and compliance work”, in accordance with Washington, DC, advocacy group Coin Center.
A new blog post penned by Coin Center govt director Jerry Brito dives into the specifics of the invoice, arguing that the Combating Money Laundering, Terrorist Financing and Counterfeiting Act of 2017 – introduced in late May by a gaggle of influential senators – largely replicates guidelines put in place by the Financial Crimes Enforcement Network (FinCEN), which first issued steering on digital currency actions in 2013 and later 2014.
According to Brito, the Senate invoice’s method as written is “counterproductive” to its meant aim of countering unlawful actions.
“Almost all of the digital currency specific language in the bill is now covered under existing money laundering law, and, if left as drafted, the proposed changes would be counterproductive to combatting money laundering.”
In the publish, Coin Center takes goal on the addition of “issuer, redeemer, or cashier of … digital currency … or any digital exchanger or tumbler of digital currency” to the definition of what constitutes a monetary establishment below the US Bank Secrecy Act, which was first instituted within the 1970s.
According to Brito, the addition is once more redundant within the context of FinCEN guidelines, “making this section of S. 1241 bill redundant with current law.”
“Furthermore, if this language were to remain in S. 1241 it would introduce a lot of confusion by creating new language and categorizations that would now be incompatible with FinCEN’s guidance and the years of compliance efforts that have emerged around that guidance,” he continued.
A transfer that might probably add confusion to the market, Brito argued, might have international implications as properly, as a result of the shift “would be counterproductive for international harmonization and cooperation.”
Coin Center additionally honed in on fears that digital currency holdings might be topic to declaration and seizure on the US border, with Brito noting that, at current, the invoice requires a report on how customs brokers may method this course of. The measure itself stays within the early levels, being referred to the Senate Judiciary Committee in late May, according to public records.
“Detecting and interdicting such instruments is the kind of thing Congress expects these agencies to be able to do and to be able to explain how they plan to do it, and mandating such a report does not say anything about policy,” Brito wrote.
Congress picture by way of Shutterstock