- The US Senate considers cryptocurrency an absolute evil
- Banning cryptocurrencies is the easiest way out, senators say
- How does the act threaten cryptocurrency?
- An attempt to find like-minded people in the world: the head of the FATF calls on the G7 to fight the “lawless crypto space”
In the United States, Senator Elizabeth Warren (D-MA) and Senator Roger Marshall (R-KS) are pushing legislation closing loopholes to attackers who can use cryptocurrency to launder money. In fact, the Digital Asset Anti-Money Laundering Act is continuation of the strategy to ban cryptocurrencies. In the Act, software developers and transaction validators are treated as financial institutions, which actually makes the cryptocurrency useless. Warren loudly declares that she is leading an “army against cryptography.”
The US Senate considers cryptocurrency an absolute evil
Laundering criminal money through the conventional financial system is illegal. Studies have long shown that the proportion of money laundering using crypto assets is small, and most incidents occur using fiat currencies.
However, supporters of this new legislation want to convince everyone that money laundering is a problem unique to crypto assets, occurring on an unprecedented scale. And law enforcement agencies are unable to stop this because of outdated laws. In fact, they label a new unexplored crypto sphere, and pursue a long-term strategy of banning cryptography under the guise of anti-money laundering policy.
Banning cryptocurrencies is the easiest way out, senators say
An objective assessment of the Digital Asset Anti-Money Laundering Act shows that the legislation is not necessary and is intended to promote a policy that completely prohibits cryptocurrency.
The claim that the Warren-Marshall bill reveals gaps in existing anti-money laundering laws contradicts the list of successes of law enforcement agencies in identifying, arresting and charging those who use crypto assets for money laundering. These police actions stopped illegal actions worth hundreds of millions of dollars.
Moreover, from a recent report by the US Treasury Department on the risks of illegal financing in DeFi, it is clear that those who engage in illegal activities still prefer to commit their crimes in the old-fashioned way – through paper currency. This is due to the fact that money laundering using fiat and non-transparent jurisdictions is easier and gives more chances to avoid detection by law enforcement agencies than a traceable blockchain. Even the terrorist group Hamas is to stop accepting donations in cryptocurrency.
How does the act threaten cryptocurrency?
The new law requires software developers and validators of blockchain transactions to register as financial institutions. But the problem is that these people are virtually unable to do it. The authors of this legislation know this; moreover, they are aware that requiring software developers and validators to comply with the same compliance regime as adopted in banks will lead to the collapse of the crypto economy.
An attempt to find like-minded people in the world: the head of the FATF calls on the G7 to fight the “lawless crypto space”
The President of the Financial Action Task Force (FATF), Raja Kumar, called on the G7 advanced economies to lead the implementation of the recommendations of the supervisory authority to combat illegal financial flows through cryptocurrencies. In a strongly worded letter titled “An End to the Lawless Crypto Space,” Kumar stressed the need for urgent action to shut down an environment that allows criminals, terrorists and rogue states to exploit crypto assets. FATF has called on countries to adopt new requirements, including a controversial “travel rule” requiring crypto service providers to collect and exchange information on high-value transactions to prevent money laundering and terrorist financing.
Kumar stressed that progress in implementing the updated FATF requirements for crypto assets remains low: 73% of the country still does not meet the standards or only partially meets them. And, although analysts estimate that only a small percentage of crypto transactions are illegal, Kumar believes that these figures are greatly underestimated. He stressed the importance of the G7 countries taking a leading role in the full implementation of the global FATF standards to ensure collective success in the fight against illegal financial activities facilitated by cryptocurrencies.
It is obvious that the US will lose a lot by abandoning the crypto economy. In the current situation, they have two options – to accept it or try to force the whole world to abandon the new concept altogether. And despite the obvious fact that the second way is doomed to fail, they still chose it.
