The U.S. government has removed two provisions from the National Defense Authorization Act (NDAA) aimed at addressing anti-money laundering (AML) concerns surrounding cryptocurrencies.
The NDAA is the law that authorizes how the Department of Defense can use federal funds. Among the extensive list of regulations The two removed from the NDAA specifically outlined a thorough review system and reporting of cryptocurrency activity to combat illegal activity.
The first provision requires the U.S. Treasury Secretary to work with banks and government regulators to develop a risk-focused inspection and review system for virtual currencies for financial institutions.
The second clause specifically addressed combating anonymous crypto-asset trading, including crypto mixers and tumblers.
This includes producing reports detailing the volume of crypto-asset transactions associated with sanctioned entities. Additionally, the report will cover regulatory approaches taken in other jurisdictions.
Guidance on implementing virtual currency regulations will then be given to the US government.
“Recommendations regarding laws or regulations related to the technologies and services described in paragraphs (1) and (3)”
On July 28, Cointelegraph reported that the US Senate passed the NDAA worth $886 billion.
The crypto-related amendments include elements of the Digital Assets Money Laundering Prevention Act, introduced in 2022, and the Responsible Financial Innovation Act, which aims to take preventive measures to avoid a repeat of FTX-type incidents in the industry. It is included.
It was proposed by a team of senators including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall.
Related: FinCEN proposes to designate crypto mixers as money laundering hubs
Recently, the US government has been deliberating issues related to money laundering and terrorist financing facilitated by the use of cryptocurrencies.
The US House of Representatives Committee on Financial Services held a meeting on November 15th to discuss illegal activities within the cryptocurrency ecosystem.
The meeting also considered how crypto exchanges and decentralized finance providers are proactively working to prevent money laundering and terrorist financing.
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