- The US government recently removed two crypto-related provisions from the National Defense Authorization Act (NDAA) that aimed to address anti-money laundering concerns.
- The provisions would have required the Treasury Secretary to establish a risk-based examination system for financial institutions to review crypto activities, and mandated a report on anonymous crypto transactions with recommendations to combat illicit use.
- Despite removing the NDAA provisions, the government is still focused on regulating crypto through enforcement actions like the DOJ’s Binance settlement, the SEC’s lawsuit against Binance, and Congressional hearings on illicit activity in crypto.
The United States government recently eliminated two provisions from the National Defense Authorization Act (NDAA) that aimed to address anti-money laundering (AML) concerns related to cryptocurrencies. This article explores the removed crypto regulations and the government’s efforts to combat illicit activities facilitated by digital assets.
Provisions Removed From NDAA
The NDAA is an annual bill that authorizes defense spending. Two crypto-related provisions were removed from the 2023 NDAA before it was signed into law.
The first provision required the Treasury Secretary to establish a risk-based examination system for financial institutions to review crypto activities.
The second provision mandated a report on anonymous crypto transactions, especially those involving mixers and tumblers. The report would have provided recommendations for legislation to combat illicit crypto use.
Ongoing Efforts to Regulate Crypto
The removals come as U.S. regulators grapple with applying existing laws to the crypto industry. The DOJ’s settlement with Binance, which imposes strict compliance requirements on the exchange’s operations. The SEC’s lawsuit against Binance, which alleges the exchange violated securities laws. The SEC is incorporating evidence from the DOJ case. A House Financial Services Committee hearing on illicit crypto activity and AML practices by exchanges and DeFi platforms.
Conclusion
The dismissed NDAA rules indicate uncertainty around crypto regulations. However, the government is clearly still focused on tackling crime and protecting consumers in the digital asset market through enforcement actions and proposals for new legislation. Ongoing cases and hearings will likely shape the eventual regulatory framework for cryptocurrencies.
